10th Parliament · 1st Session
The Deputy President (Senator Plain) took the chair at 3 p.m., and read prayers.
University Building Site - Rental
Purchase’ Scheme : Rate op Interest - Re- appraisement of Building Sites.
– Has the Minister for Home and Territories yet received an answer to my question of last week concerning the reported erection of a building or buildings on the site reserved for university purposes at Canberra?
– No; but I shall endeavour to expedite the inquiry.
asked the Minister for Home and Territories, upon notice -
– I am in communication with the Federal Capital Commission in regard to this matter, and shall advise the honorable senator as soon as the necessary information is available.
asked the Minister for Home and Territories, upon notice -
– The answers to the honorable senator’s questions are -
Senator BARNES brought up the report of the Parliamentary Standing Committee on Public Works, together with minutes of evidence relating to the proposed erection of Commonwealth offices, Sydney.
Renown at Outer Harbour.
– Is the Ministry aware that there is great disappointment throughout South Australia in consequence of the report that the Renown, which is bringing the Duke and Duchess of York to Australia, will not visit that State? Is he aware, also, that strong representations have been made to induce the imperial authorities to allow the Renown tocall at theOuterHarbour; and will the Government continue to press this request in view of the fact thatthefraternizing of officers and men of the Renown with the peopleof South Australia will do much tocement the bonds of imperial unity ?
– With regard to the first two questions put by the honorable senator, I may say that all the representatives from South Australia in the Federal Parliament made strong representations to the Government on the subject, and the right honorable the Prime Minister (Mr. Bruce) communicated their request to the British authorities.I am not seizedof the nature of the reply, so I suggest that thehonorable senator repeat the latter part of hisquestion to-morrow.
SenatorNEEDHAM asked the Leader of theGovernment in the Senate, upon notice - 1.Willthe Ministerstatewho advised the Government that interest was not payable on the money due by Messrs. Kidman and Mayoh to theCommonwealth in connexion with, the wooden vessels contract, from the date of the decisionarrivedat by Sir.Mark Sheldon?
– The right honorable the Prime Ministersupplied the following answer : -
asked the Minister representing the Prime Minister, upon notice -
– The righthonorable the Prime Minister has supplied the following answer:- 1.No . 2.Therehavebeennoprosecutionsofanyperson for being or continuing to be a memberof an unlawful association, the act having proved effective in discouraging violation of its provisions.
asked the Minister representing the Prime Minister, upon notice-
Whether the investigations of the Royal Commission on National Insurance have proceeded sufficiently far to enable the Government to proceed with the promised National Insurance Bill?
– The right honorable the Prime Minister has supplied the following answer : -
The Government is awaiting the royal commission’sfinal report on finance and admin istration, which is necessary to enable it to proceed withlegislation.
asked the Leader of the Government in the Senate, upon notice -
Whenit is. proposedtoaskParliamentto deal with the lastamendmentofthetariff?
SenatorPEARCE.-The matterwill be dealtwithasopportunityoffers.
asked the Minister representing the Minister for Works and Railways, upon notice -
– The honorable the Minister for Works and Railways has supplied the following answer : -
Is it afactthat we are importing munitions from overseas?
If so, from whom?
What is the nature of such munitions? 4.What was the value of the importation of such munitions for the last five financial years?
I replied to questions Nos. 1 to3 andnow furnish the informationaskedforin question No. 4 -
Motion (by Senator Elliott) agreed to-
That leave begiven to introduce a bill for an act to amend the Defence Act 1903-1918.
SenatorPEARCE (Western Australia -Vice-PresidentoftheExecutive Council) [3.10]. -I move -
Thatthe undermentioned additional estimates of expenditure for the Common wealth Council for Scientific and Industrial Research for the year ending the 30th June,1927, be approved and passed: -
Honorable senators will rememberthat last year Parliament appropriated from the ConsolidatedRevenue Fund an amount of £250,000, to be expended by the Council for Scientificand Industrial Research. It was notintended thatthat sum should be spentin one year, but that it should suffice forthree, four, or a greater number of years. To secure parliamentary control over the expenditure, the money was paid into a trust fund. Section 17b, sub-section 3, of the act provided that nothing should be spent from the trust account except in accordance with the estimates of expenditure approved by Parliament. The council met and prepared its programme for the year 1926-7. The various sums for which it asked may be found at page 269 of the estimates for the current year, which were duly passed by Parliament and were embodied in the AppropriationAct 1926-7. On the passing ofthatact those moneys became available from the trust fund. The council has since discovered that theamountsthenmadeavailable are notsufficientforitspurposes:hence the necessity to seek additional sums. I draw particular attention to the fact that this is not on all fours with ordinary expenditure, because parliamentary approval must first be obtained before the expenditure of any of the money in the trust fund is permissible. It is, therefore, necessary to bring the matter forward in this way, and not in the form of a bill.
– Are allof the investigations mentioned in themotionbeing carried on in the Commonwealth alone?
– Not all of them. The investigation into food preservation and cold storage is being carried on partly in Australia andpartly on vessels travelling between Australia and the United Kingdom. That, of course, is necessary.
Debate (on motion by Senator Needham) adjourned.
Debate resumed from the 18thMarch (vide page 669), on motion by Senator Pearce-
– Ever since the proposals contained in thebill were first mooted, I have been endeavouring, by careful study and thought, to arrive at a sound conclusion and a right decision as to whether they are in the best interests of those Australian citizens who reside in the State of Tasmania, whom I have the honour to serve in the Senate, as well as the citizens of the other States of the Commonwealth. It has been no easy task for a political novice like myself. It has necessitated much careful reading and thought, and a close study of the history of the birth of this great Commonwealth of which every right-thinking Australian is justly proud. I am in my political babyhood, and I find it rather difHcu.lt, at times, to discover the best way of approaching subjects such as this. But I am a soldier of a good many years’ standing, and I have learnt to adopt a certain line of action in the working out of any problem with which I am faced. My training has taught me that the proper method is to put down on paper the pros and the cons, the factors that operate against your success and those that assist you, and I have followed that method In the present case. In a federation such as ours, the financial relations between the central government and the component states are of the utmost importance. The conferring of large powers on the central government is absolutely useless unless sufficient revenue is provided for that government to operate those powers. The determination of the financial relations between the States and the central government was the principal stumbling block in the path of the framing of the Constitution and the inauguration of the federation. Those financial relations are still the subject of considerable controversy, and a solution of the problem which they present is not yet in sight. It is a most difficult and, I consider, a very urgent problem. I cannot subscribe to the doctrine that has been put forward by certain honorable senators who oppose the bill, that there is no need for haste in this matter, that no mandate has been given to the Government to take this action, and that the Commonwealth should continue to rub along as it has been doing for a number of years. I do not for a moment admit that the per capita system is either just or equitable. The main financial feature at the inception of federation was the provision in the Constitution that the Commonwealth should have sole control over Customs and excise. The States and the Commonwealth were given equal powers in regard to all other forms of taxation. The power of the Commonwealth over Customs and excise, however, was limited and qualified during the first ten years of federation. Those qualifications and limitations, in my opinion, were of a strictly temporary character. At the outset it was obvious that the Commowealth would not attempt to give effect to the whole of the 39 articles of section 51; and, as honorable senators are aware, many of those powers are still dormant. The expenditure of the Commonwealth was limited during the first ten years to one-fourth of the net revenue derived from Customs and excise; but control over that revenue was vested absolutely in the Commonwealth after the expiration of that period. That principle was confirmed when, in 1909, the people of Australia at a referendum definitely refused to make it a constitutional obligation on the Commonwealth Government to pay to the States 25s. per head of the population. On the expiry of clause 87, commonly known as the Braddon blot, Australia adopted the per capita system for the distribution of the surplus revenue of the Commonwealth to the States, not, in my opinion, because it was the best or fairest method, but because, possibly, it was the easiest to calculate, and was the least likely to arouse hostility from the States. At that time, we must remember, the Commonwealth had undertaken direct taxation to only a very limited extent. It derived the bulk of its revenue from Customs and excise duties, and the money so derived was assumed to be collected approximately at an equal rate from each individual in the Commonwealth. In other words, it was deemed to be raised in proportion to the population of the States, and it was distributed on the same basis - that is to say, on a per capita basis. But that assumption of equal financial ability in proportion to population is a fallacy. It has no foundation in fact, because necessarily the States cannot be equal in wealth, resources, or natural advantages. Even if they are equally endowed in these respects, they may be at very different stages of development. Inequalities are also brought about through the application of Federal policy, some States getting greater benefit than others through the operation of Commonwealth laws. For instance, a protective policy may be a great advantage to a State like Victoria, and at the same time a considerable burden to a State like Western Australia. When States differ so much in climate, natural resources, area, and development, there are bound to be great divergences of wealth, and clearly a per capita system of distribution of surplus revenue to the States cannot be regarded as equitable. However, that was the system adopted in 1910, and under it Australia carried on with special temporary grants to
Western Australia and Tasmania until 1914, when, like a thunderbolt, there came upon us the war. It was necessary for us to fight for our national existence, and everything else went by the board. By the end of the second year of that desperate and bloody struggle, the Commonwealth was compelled to enter the field of direct taxation, and as the war progressed it had a steeply-graded income tax, death duties, taxes on wartime profits, and an entertainments tax. It was committed definitely to direct taxation, because there was no longer sufficient revenue from its indirect taxation. Logically, and on principle, when there was no surplus revenue from indirect taxation, the per capita payments to the States should first have ceased ; but at that terrible time of stress and strain no one had much thought for logic. We were out to win, and . possibly the easiest course politically was taken - that of imposing sufficient direct taxation to cover the extra burden on the Treasury. The end of the struggle thus saw us with both federal direct taxation and per capita payments to the States, and we are still in that position to-day.
I believe in the abolition of the per capita payments to the States, and in the substitution of some more statesman-like system of finance between the Commonwealth and the States. How the change is to be brought about, I do not know; but I hold that the present position is untenable. It may be of great importance to the more populous States to retain the per capita payments, but these payments are, in themselves, of comparatively little importance to a small and struggling State like Tasmania, which, even with its per capita grant, does not receive sufficient revenue to meets its absolute financial obligations, and must have further assistance from the central Government. The population of Tasmania, which was one-twentieth of the whole of the population of Australia at the time of federation, is now, notwithstanding an increase, only one-thirtieth of the population of the whole of the Commonwealth. Obviously the per capita system does not suit Tasmania. Senator Barwell told us that the Commonwealth is rolling in wealth, and that the Commonwealth Treasurer has to rack his brains to know what to do with all the money he is getting. I do not believe it. If it is true, I should like the Government to give those who are serving in our Citizen Forces a better deal. When, recently, I put in a requisition in the ordinary way for a rubber stamp, costing about 2s. 6d., I received in due course from head-quarters, Melbourne, word regretting that there were no funds available for the purpose. It does not seem to me, therefore, that the Commonwealth is rolling in wealth, and has very much money to throw away. As a matter of fact, a careful study of the position will disclose that it has tremendous commitments to face in the immediate and near future.
I do not know who are competent to say what it is the duty of the Senate to do, but we are told by Senator Ogden, that if it does not do its duty, and reject this bill, it will sound its own death knell, and that if the bill is passed the Commonwealth will automatically assassinate the States. I may bo somewhat dense, but I do not think I have ever heard a sillier statement than that, because it follows that if we assassinate the States we automatically kill the Commonwealth also, the people of the States and the Commonwealth being absolutely one and the same. It has been maintained that the Government has received no mandate for this legislation, but fourteen or fifteen months ago, when I was attempting to woo the affections of the electors in Tasmania, the payments to the States was a very prominent question. I do not think I addressed one meeting at which the matter was not mentioned. The cry then was that the Commonwealth should get out of direct taxation as far as possible, and if the proposals put up by the Commonwealth Treasurer, and set out in a pamphlet he issued, were not a step in that direction, I should like to know what they were. Notwithstanding what Senator Barwell and others have said, this question does not appeal to the political passions or personal feelings of the electors. It does not make the slightest difference to- me if I disburse £1 to one authority or make two payments of 10s. to two separate authorities. That is the crux of the whole matter. I do not hold any brief for the Tasmanian Government or any other government. I was not sent here by the Tasmanian Government, but by the people of that State whose interests I intend to protect so far as I am able.
During the debate I have endeavoured to follow the arguments of honorable senators opposed to the bill, who seem to think that the people of Australia are divided into two hostile camps. That is not so; but there may be two hostile camps of politicians. We have been informed that if this measure is passed the States will he financially strangled - that the Commonwealth Government is now ende3.vour.1ng to assassinate them. It has also been said that the -Government is challenging the States with a double-barelled pistol, one barrel of which is to be used te shoot them and the other to murder them. That statement is stupid. I have tried quite dispassionately to follow the arguments of those opposed to the hill; but from the figures placed before me, and from the information I have been able to obtain, I believe the measure is entirely in the interests of the States. Prom some of the arguments adduced it would appear that the Commonwealth Government has no right to introduce legislation without first consulting the State Governments; but with that I do not agree. We have a duty to perform to the people, and that is to assist in framing laws for the good government of the Commonwealth. To say that the Commonwealth desires to strangle the States is ridiculous, because to do so would be equivalent to committing suicide. I have no fears concerning the results which may follow my action in supporting the bill. I have endeavoured in my own way to come to a right decision, and the future alone will prove whether I am right or wrong.
– I do not propose to record a silent vote on this measure, nor to traverse the ground covered by previous speakers. I desire, however, to place on record my opposition to the bill. I know from the information I have gathered in travelling through South Australia, that the people of that State are taking a lively interest in this measure, to which
I think a majority are opposed.
– The Government is opposed to it; not the people.
– Some honorable senators seem to think that they are the Heaven -born guides of the people of the States. The State representatives have a better opportunity of gauging the psycho logy of the people within the States than those resident elsewhere. As some honorable senators .are at times ‘compelled to be absent from “the -State which they represent for months at a time. I submit that State members elected by ‘the same people who elect honorable senators are best able to ascertain the wishes tff State electors. Even “though some say the Commonwealth Parliament and the StAte Parliaments are in conflict, I submit that the opinion of the State Parliaments should fee considered. The Minister who introduced the bill ‘(Senator Pearce), and the Honorary Minister (Senator McLachlan), who supported him, said that the States must “toe the line.” Ministers have no more right to say that the States should toe the line than the States have the right to say that the Commonwealth must do so.
–That is what every one should do.
– -The Commonwealth Parliament is prepared to “ toe the line.”
– The Commonwealth proposes to take away something from the States and will not say what it intends to give in return.
– It has said very definitely what it will give in return.
– I should like some one to explain what it is. Neither of the Ministers who have spoken has definitely indicated what the Government intends to substitute for the per capita payment. The Government has said, “ Carry the measure and we shall have a conference afterwards.” It may be that the Commonwealth will alter its mind again, as some one suggested, and revert to the per capita system. The States are not likely to be caught in this way. The Commonwealth Government has engendered a feeling of distrust on the part of the States, and is daily adding fuel to the flames. The States are under the impression that they are being robbed of their natural rights. Senator Carroll, who is supporting the measure, said that the States were entitled to a portion of Commonwealth revenue.
– I still think so.
– The Commonwealth Government wishes to dispense with the per capita payments, in return for which it is suggested that it will give the States the right to collect portion of the direct taxation which it now imposes. From what source can the State derive sufficient revenue if that is done? The Commonwealth has the easy method of collecting indirect taxation in the form of Customs and excise duties of which we have heard so much.
– It is a bad method.
– It may be, but the honorable senator is supporting a Government which proposes to collect £44,000,000 in Customs and excise duties this year. The honorable senator is associated with a party which for a long time has been complaining of the heavy duties imposed upon primary producers under the tariff.
– “Will the Labour party assist us in reducing duties? The members of the party to which the honorable senator belongs say that they want still higher duties.
– When Senator Chapman was wooing the electors of South Australia, he made some very dashing statements, and extravagant promises to the primary producers regarding the tariff.
– Oh, no.
– I have not forgotten the honorable senator’s speeches. I read his utterances.
The DEPUTY PRESIDENT (Senator Plain). - I ask the honorable senator to connect his remarks with the bill.
– I ask the honorable senator to quote one extravagant statement I made.
– The honorable senator said that he would do all he could to reduce the duties on agricultural machinery. Senator Chapman belongs to the Country party in South Australia, the Leader of which, Mr. Mcintosh, is travelling the State and speaking in opposition to this bill.
– Where has he spoken against it?
– In different parts of the State. Every political party iu South Australia is opposed to the withdrawal of the per capita grant. The Country party, to which Senator Chapman belongs, has declared against it.
– The Country party in South Australia has never declared officially against it.
– The members of the Country party in that State are opposed to this measure.
– That is a wrong statement.
– The honorable senator knows that it is not. Senator Pearce suggested the other day that the party whip had been cracking on this side of the chamber. There is no need for that, for the reason that every honorable senator on this side has signed a platform which includes among its planks the retention of the per capita grant-
– The Labour party’s platform does not bind its members. Mr. Hogan, the leader of the State Labour party in Victoria said recently that Labour candidates need take no notice of this plank in its platform; all that they had to do was to follow him.
– I am bound by every line of the platform which I signed. Every honorable senator should be prepared to stand up to his promises and election pledges; otherwise he has no right to seek the confidence of the people. Senator Greene the other day said that honorable senators from New South Wales were pledged to the continuance of the per capita grant. I take no interest in the domestic affairs of the Nationalist party; but if honorable senators from New South Wales have so pledged themselves they have no right to break their pledges. It has been said that the withdrawal of the per capita, payments will have no effect on the finances of the States, and that, in any case, we should be satisfied to accept the word of tha Government that the States will be at no disadvantage by reason of the passing of this measure. What would happen if the States refused to confer with the Commonwealth? An impasse would bc reached, in which event the States would have to raise revenue by other means. Of the members of the various State Parliaments, T doubt if twelve are in favour of the Government’s proposal. In every State parliament, irrespective of party, there is an almost unanimous feeling against this proposal to rob the States of something to which they consider they are justly entitled. Except that the Government has suggested that certain fields of taxation, such as land tax, estate and death duties, and the amusement tax, may be vacated by the Commonwealth, no details of any compensation to the States for the withdrawal of the per capita grants have been announced. It has been said that the States could reimpose the land tax relinquished by the Commonwealth; but to increase the land tax in South Australia, where there is a conservative Legislative Council, would be impossible.
– The land tax in South Australia was increased only last year.
– It was increased by one half-penny in the £1. To make up a loss of £700,000 something more than that would be needed. Probably it would mean lowering to £100 per annum the income-tax exemption, which in South Australia is already the disgracefully small amount of £150 per annum, and the imposition of increased amusement taxes. I remind honorable senators that taxation falls more heavily upon the poorer classes of the community than it does upon the wealthy citizens of this country. Before the Government attempted to alter a system which has given satisfaction for seventeen years, it should have taken the Senate into its confidence and made clear what it proposed to offer the States by way of compensation.
– Does the honorable senator not think that to offer the States certain fields of direct taxation is to offer them something?
– Legal men have told me that the Staten would bc unable to aggregate estates for land tax purposes. At present, a man who holds property valued at £15,000 in each of three States is taxed by the Commonwealth on the total value of £45,000, but each State would bc able to levy taxes on only £15.000. The result would be that the States would be forced to impose much higher rates to obtain the same amount of revenue from land, taxation. The Government, which legislates only in the interests of the wealthy members of the community, has introduced this bill in their interests.
– Is that why all th?, wealthy men are opposed to it ? “
– I understand that there are some wealthy men among the Government supporters in this Senate.
I intend to oppose the bill, because I believe that it will interfere with thefinances of the States, and tend to create ill-feeling between the Commonwealth and the States. I intend to do what I consider will bo in the interests of the people whom I represent. I presume that the Ministry would not have persisted with the bill if it had not been assured of sufficient, support in this chamber to carry it; but would have accepted Senator Lynch’s proposal that it be read a second time six months’ hence. It is singular that legislators with long ministerial experience in both this chamber and another place are opposed to it. Many honorable senators who intend to vote for the second reading will do so because they lack judgment, and have not the necessary foresight to prevent evils from coming upon the States. I can see a great evil in the offing; but I am hoping that it may be averted. If this measure passes, the Commonwealth Government will be in the position of a dictator to the States, which will find very great difficulty in raising sufficient money to carry on essential services. South Australia, unfortunately, will have to curtail seriously its important public works programme, and probably about 1,500 men wil] be thrown out of employment. Being a member of the Loan Council, that State, with other States, must confer with the Commonwealth Treasurer, and agree as to the flotation of loans for its public works. Itis important that the State should be able to obtain sufficient to carry out its important programme of works. I hope that the Government will discard its Mussolinilike attitude towards the States; but anything that may be done now will be nf only a temporary character. The people Rave the franchise, and when they have an opportunity to exercise it they will insist on justice being done to the States, regardless of whether the offending government is Labour, Liberal, Nationalist, Country party, Composite, or other “ jubilee mixture.” I hope that the bill will be defeated.
Senator GIVENS (Queensland) [3.54J. - I do not propose to detain the Senate very long. Even if I were so inclined ray health would not permit me to speak at length: At the outset I should like to say that, stripped of all the rhetorical misrepresentations and verbal “ tosh “ with which it is surrounded, the question before the Senate is a very simple one; so simple, indeed, that amongst intelligent and disinterested people there shouldbe no room whatever for difference of opinion or dispute. We have been asked over and over again what mandate we have for bringing forward this legislation. In reply 1 ask how many times should Parliament require a mandate to do what the Government now proposes to do. The people, when they accepted the Constitution, gave the Parliament a mandate to deal with the finances of the Commonwealth in any way it thought fit after the first ten years of federation. When that period expired the question was put to the people again, and once more they invested Parliament with full authority to do as it deemed best. What is the issue before the Senate? In raising revenue for either Commonwealth or the States, each separate legislative entity has complete authority to raise all it requires in its own way. lt is true that for a limited period the Commonwealth was obliged to return to the States a certain proportion of the revenue received from Customs and excise duties, as well as any surplus that remained over and above* that required to meet the obligations of the Commonwealth Government. Is there now any surplus of Customs and excise revenue which the Commonwealth does not require for its own purposes ? With one small exception every avenue of taxation, except that of customs and excise, is as wide open to the States as it is to the Commonwealth. The small exception is that the States may not impose taxation on Commonwealth loans. Outside of that, every State has complete authority to tax its people to provide all the revenue it needs to meet its obligations. What is our duty in these circumstances ? Our plain duty, as a Commonwealth, is to raise sufficient revenue efficiently to carry out the functions of the Commonwealth Government, but not a shilling more. Similarly, it is the duty of the States, since they have full power to raise every shilling they require to meet their own obligations, to adopt the same course. The Commonwealth was, during the first ten years of its existence, “ cabin’d cribb’d confined “ by the operation of section 87, which was rightly described as the Braddone blot in the Constitution. Honorable senators opposite well know what happened when the Labour party first attempted to introduce a beneficent system of invalid and old-age pensions. It was objected that with an overflowing Customs and excise revenue the Commonwealth Government had no right to impose direct taxation to provide the necessary funds to pay the pensions, with the result that if it paid the pensions from Customs and excise revenue, it would have been obliged to raise £4 for every £1 it needed.
– It had the right of direct taxation.
– No one , would have advocated that course then. In addition to returning to the States the agreed-upon proportion of the Customs and excise revenue, the Commonwealth has also returned to them, in round figures, about £7,000,000. Since the Commonwealth and the State Governments have co-equal authority in taxation, is it not the obligation of both to raise the revenue it requires, and no more ? The position appears to me to be similar to that of two men, camped beside a wellwooded stream in the bush, each with a full supply of tucker, and one complaining that he will starve because the other will not draw sufficient water or cut enough firewood for him. That really represents the position which the States are taking up, because, as I have shown, they have full authority to raise all the revenue they require, and, therefore, it is their duty and obligation to do so. But, after all, we need not wonder at this whining of the State Governments. Have honorable senators never heard the bellowing of an overgrown calf when it is undergoing the process of being weaned ? That is what is about to happen to the State Governments ; but everybody knows, of course, that it is good for the calf to be weaned, and good also for the mother. Therefore, we need not pay too much attention to all this clamour that the State Governments are making. The opponents of the bill talk with their tongues in their cheeks when they declaim about the injustice which the Commonwealth Government is doing the States. Actually they mean, not the States, but the State Governments. There should be no confusion on this point.
– I think the honorable senator is unfair in saying that. I have never been influenced by the attitude of my State Government.
– - Let me ask the honorable senator one question. How can we do an injury to the States by refusing to tax their people ?
– That does not justify the honorable senator in saying that we are being influenced by the State Governments.
– Then I shall exempt the honorable senator.
– The honorable senator must exempt all other opponents of the bill.
– Very well, I shall exempt them; but I made the statement, and I stand by it. Briefly put, the position is that the State Governments desire to be relieved of their obligations to raise the revenue which they require for State governmental activities. It has been stated that the passage of the bill will beggar the States. Are they not in the position of beggars now, seeing that they are dependent on our bounty, and are reaching out their hands every month for Commonwealth payments? Our aim should be to make them financially independent of the Commonwealth. That is what this bill proposes to do. I regretted to hear the Vice-President of the Executive Council say, when moving the second reading of the bill, that it was intended to convene another conference between the Commonwealth and State representatives in order to, if possible, agree upon proposals to adjust the financial relations of the Commonwealth and the States. In my view nothing of the sort is required. What is required is complete severance of the financial relations with a view to making the States absolutely independent of the Commonwealth.
– The Government does not propose to do that. It says that it hopes it may be possible at another conference to arrive at an agreement which might even include the continuance of the per capita payments.
– I am opposed to any arrangement that will not provide for the absolute independence of both the Commonwealth and the States. I lake this opportunity to remind Senator Findley that that was the attitude which the old and courageous Labour party took when this issue was before Parliament seventeen years ago. It is the only reasonable and sensible attitude to take. At present the Commonwealth has nothing whatever to do with’ the spending of certain revenue which it collects. Approximately, it raises £7 per head of population by indirect taxation. This burden presses more heavily upon the poor, and the man with a large family, than upon the wealthier sections of the community. If the Labour party of lo-day had its way the Commonwealth would be compelled, not only to raise the revenue which it requires, but also to provide for the needs of the States. To do this, it would have to impose an unduly heavy indirect tax by way of Customs and excise duties, upon the poorer classes in the community, which honorable senators opposite claim exclusively to represent. As a matter of fact, they do not represent that section of the people at all; they misrepresent them. If the alleged Labour representatives of to-day had the courage of the old-time Labour party, they would not tolerate the attitude of the State Governments for a moment, lt appears to me that a large proportion of these alleged Labour men have neither sufficient brains to know what is the right thing to do nor the courage to do it if they had. I can easily prove the truth of that statement.
– Who is responsible for the amount of Customs and excise revenue that is being received today, if not the Government of which the honorable senator is a supporter ?
– I am not supporting the bill because this Government introduced it; and I did not support- the tariff because it was brought in by this Government. I have never supported the raising of high Customs and excise revenue by any Government. If wc- had an effective protective tariff we should derive little or no revenue from it.
– What does the honorable senator call the existing tariff ?
– It is not an effective one. How much revenue does the Commonwealth derive from the importation of wheat, butter or sugar, in respect of all of which items there are protective duties? None whatever; simply because the tariff in those cases is effective.
– The problem is to deal with the conditions that make the existing tariff ineffective.
– The Customs and excise receipts this year will amount to £44,000,000, equal to £7 per head of the population.
– That is the correct figure. I may be pardoned for showing the effect that that has upon me. There are nine persons in my family for whom I am responsible. I live in such a fashion that I suppose my contribution is well up to the average. Therefore, I and my family are taxed indirectly to the extent of £63 a year. That is intolerable. My objection to the continuance of the per capita payment is that it will compel the Commonwealth to continue for all time to collect an enormous revenue from indirect taxation, thus placing a heavy burden upon the poor people in the community.
– If we succeeded in obtaining an effective protectionist tariff we should have to revert to the imposition of direct taxation.
– I do not object to direct taxation ; it is the onlyreally honest form of taxation.
-Why, then, vacate that field?
– Simply because the Commonwealth does not require it. It proposes to give to the honorable senator’s party, which is in power in five of the States, the opportunity to impose direct taxation to its heart’s content if it is not afraid to do so.
– What chance is there of securing the passage of a progressive land tax through the Victorian Parliament?
– I do not know. I am not worrying about that. We hear a lot of “ tosh “ spoken about the inability of the States to impose taxation on aggregated incomes or to aggregate estates for land taxation purposes. That has absolutely nothing to do with the question which we are considering. It would be a piece of impertinence on our part, and it is impertinent for the Commonwealth Government, to suggest what taxation the States should impose, or the methods they should adopt to secure the amount that they will lose by the withdrawal of the per capita payment. All that we have to do is to raise sufficient revenue for our own purposes, and to throw upon the States the onus and the obligation of raising sufficient to enable them to carry on their services. Let them raise it in any way that seems good to them, without any suggestion or dictation from us. The Vice-President of the Executive Council (Senator Pearce), desires that a further conference shall be held to bring about an adjustment of the financial relations of the States and the Commonwealth. Such action will not do away with the squabbles and bickerings that have accompanied the consideration of this question. We want a complete severance of the financial relations of the two authorities, and complete independence for each. Both the Commonwealth and the States have absolute and. plenary power within their own spheres. Every avenue of taxation, with one exception, is as wide open to the States as it is to the Commonwealth. It is the bounden duty and the obligation of the States to raise their own revenue by any method that pleases them.
.- I propose to support the bill. During the course of the debate it has been stated that the platform upon which we went to the country debars us from doing so. I shall read to honorable senators the clauses of that platform which relate to finance. They are -
Those two clauses, which must be read in conjunction, certainly do not authorize the States to sit back and decline to discuss this matter. Clause a clearly contemplates a re-alignment of the spheres of taxation. I am strongly opposed to the duplication of taxation that was forced uponus by the outbreak of the war, and one of my reasons for supporting this measure is that it will tend to rid us of such duplication. Senator McHugh, I think, stated that the Government had not advanced any proposals to take the place of the per capita payment. I say that, on the contrary, the Government has distinctly informed the States that it proposes to vacate the field of land taxation, entertainments tax, estate duty, and a considerable portion of the income tax. Ultimately, I understand, when it is found possible to raise by indirect taxation revenue sufficient for Commonwealth purposes, it is intended to retire altogether from the field of income taxation. That is an absolutely clear and distinct proposition, and the only matter that appears to await a settlement is the proportion of the income tax field that shall be reserved to the Commonwealth. I agree with Senator Sampson that we need not worry as to the effect of this measure upon the general public; if we satisfy the people that we ure out to effect an economy, it will be immaterial to them to whom tlie taxation is paid.
– Will the honorable senator tell me how it is proposed to lighten the burdens that are now placed upon the people of this State ?
– By doing away with the duplication of taxation.
– I understand the Treasurer (Dr. Earle Page) to have stated that the wiping out of the Commonwealth departments will effect a saving in salaries of £100,000 a year
– Will that make up for what is lost by the abandonment of the federal land tax ?
– The Commonwealth must raise sufficient revenue for its own purposes.
– Where are those revenues ?
– The Commonwealth is frequently charged with having more money than it knows what to do with. It is said that its revenues bubble forth like a gushing stream.
– If the federal land tax is abandoned, what other source of revenue will the Commonwealth have?
– There will be the revenue from Customs and excise, and a certain amount of income tax. Every year the Customs Department returns a greater surplus. Why should we continue to take money from the pockets of the people if we have no use for it ? The honorable senator knows that income taxation and estate duties were imposed as war measures. The people were promised that they would be removed whenever the Commonwealth found that it could do without them. Does the honorable senator suggest that the Government should go back on that promise?
– If we had an effective tariff we should not get more and more revenue from the Customs Department.
– The honorable senator’s contention is not supported by the experience of America, which has the highest protective tariff of any country and at the same time receives the greatest amount of Customs revenue. If the ideal of getting entirely out of the field of direct taxation can be realized, and the Commonwealth can save £100,000 a year in salaries, we should certainly support such a proposal. I shall give Senator Findley an illustration of the operation of the Federal land tax. There is an old building in the city which was returning about 1 per cent, on its capital value. It was built about twenty years ago. Recently, because high prices had been realized at a sale in the neighbourhood, the Federal Commissioner of Taxation increased by £900 the land tax on that land. Who is to pay the additional amount ?
– The owner ought to pay it, because the community has created the additional value.
– He could not pay it, because the total revenue was not equal to £900 a year.
– He ought to pull down the old building and erect an uptodate one.
– He raised the rents of his tenants by a total of £900 a year. It is quite obvious that no other course was open to him. The tenants will have to pass on the extra amount to those with whom they have dealings. Senator Findley knows that the land tax was introduced by the party of which he is a member, ostensibly for the purpose of breaking up big estates in the country.
– And for revenue purposes.
– Yet it is operating against city lands, which it is impossible to break up into smaller areas. I support the measure because it will tend to do away with duplication of taxation, which is a source of great irritation to every person in the Commonwealth.
– It will not do. anything of the sort. The conference that the Government proposes to hold may undo what is done here.
– It has been proposed that the Commonwealth should take over State debts. The State authorities claim that a large part of those debts has been incurred on reproductive works, which are paying their way. Any scheme for their transfer to the Commonwealth should, therefore, include also a provision to take over the assets, in the making of which the debts have been, incurred; or the Commonwealth should be given a mortgage over them to the extent of the’ debts.
– Tasmania would willingly hand over its railway system with its debts.
– Some of the newspapers in this State argue that if the -per capita payments are withdrawn States like Western Australia, South Australia, and Tasmania, that have small populations, may receive greater benefits than they are entitled to have. Every mile of road and railway that is constructed in the other States brings to States like New South Wales and Victoria, that comparatively are fully developed, a rich reward. Such an argument, therefore, is fallacious. Anything which makes for greater prosperity in the States which have small populations must benefit indirectly those that have larger populations.
.- Tn the past, Commonwealth Prime Ministers and Treasurers have attempted to deal with the subject of payments to the States, but at the final pinch have all shirked the responsibility. The present Government is to be congratulated on bringing forward definite proposals for the termination of the present unsatisfactory system of distributing money to the States. Among the opponents to the Government’s proposals are several honorable members, who as Commonwealth Ministers have in the past met the State Treasurers with a view to arriving at some better scheme for adjusting the financial relations of the Commonwealth and States. Apparently they have now changed their views. Conferences have come to no satisfactory businesslike agreement. On one occasion the matter was practically settled, all of the State Treasurers leaving with the idea that a new arrangement was to be submitted to the different Parliaments for ratification, but Sir Arthur
Cocks, Treasurer of the then Government in New South Wales, went back on the understanding and the whole “thing fell through. Matters have drifted even since. When Mr. Watt was Commonwealth Treasurer the party expected that he would go through with a proposal for the reduction of the per capita payments, but he also funked the task. It is unfortunate that Dr. Page has aroused antagonism in certain directions. Many members of this Parliament in hitting at him have really been hitting at the Government, and it is quite feasible that, altogether apart from the merits of the bill now before us, personal feeling is responsible for a great deal of the opposition to it. However, it has. been shown clearly in another place and in the Senate that Dr. Page, who has had the courage to tackle this difficult question, is ably backed up by the Cabinet, and the majority of members in both branches of the legislature.
The only obstacle in the way of the settlement of this question is the attitude assumed by the State Treasurers. No one could have issued a more friendly invitation to them to discuss the matter at a round table conference than did the Prime Minister and the Commonwealth Treasurer last year ; but like a lot of sulky boys all that the Treasurers did was to sit back and say, “We have a moral right to these payments.” That is all that the Commonwealth Ministers could get out of them. We are not likely to get a settlement of this problem in that way. I am voting for this bill because it will bring about some finality. It seems to me to be the only way to bring the State Treasurers and the Commonwealth Ministers together to discuss the whole arrangement in a businesslike way. There are no difficulties in the way that cannot be overcome by a display of a little common sense. Mr. Bruce’s public life has been such, that we can take his word when he says that he will meet the Treasurers with an open mind and try to come to a businesslike arrangement with them. I have no doubt that this bill will bring the State Treasurers to their senses, and that they will come along with proposals which, of course, will benefit their own States. From this debate one would imagine that the people of the States were different from those- who elect the Commonwealth Parliament. The only difference is that at present. State Treasurers get money for no effort on their part. They are so spoon-fed by the Commonwealth grant that they have grown lazy. Year after year the Commonwealth is obliged to collect money for them to spend as they choose. I have not met any one who has not condemned that system.
– What is the remedy ?
– The State Treasurers should come forward with a businesslike proposition on behalf of the people of Australia. In conference they would meet the Prime Minister and his Treasurer also representing the people of Australia. It only needs a mutual agreement to enable each division of the Government to carry on its functions in its own sphere. It is merely a matter of a commonsense business arrangement, and I do not see the least difficulty in bringing it about. It must be remembered that whatever scheme is drawn up it must be ratified by this Parliament. If Parliament considers it one-sided, or if the Commonwealth Ministers have forced on the States something which is unjust to its own electors, Parliament can put the matter right. We are told that the Government does not represent public opinion.
– It does not represent public opinion on this question.
– What does the honorable senator mean by public opinion?
– The public should first be consulted on the matter to enable it to form an opinion.
– In his policy speech the Prime Minister announced that the Government intended to deal with the financial situation, and as the people returned his supporters with an overwhelming majority, I claim that no other Government has ever been in a better position to represent public opinion in Australia.
– But not on this question.
– Senator Findley has no evidence to show that the Government does not represent public opinion on this question. I am well aware that almost all the newspapers are opposed to the bill, and that seven chambers of commerce and chambers of manufactures are also opposed to it, but they are only a small minority of the people. They may have big interests at stake, or they may be afraid of tlie State Governments overtaxing them, but they do not represent the views of the great mass of the people. I defy any ono- to tell me how the people feel about this issue. The people yon meet on trams, trains, or elsewhere, ask, “ What is this per capita business ; what does it mean?”
– That shows clearly enough that the people did not have the matter before them at the last election.
– The people have had this issue before them ever since the Braddon section was put in the Constitution, but it is one of those difficult questions that they cannot understand. As a matter of fact, it is not a question that we’ can intelligently put to the people; they do not care twopence about it. Parliament must take the responsibility of settling it, and the present Government, because of its overwhelming majority at the last election, is justified in assuming that responsibility.
– But it ought to be fair.
– I believe in the fairness of the Prime Minister and the Treasurer, and that they will meet the State Treasurers and come to a fair and businesslike agreement with them.
– It is not businesslike to abolish the payments first and then ask the States to come to an arrangement.
– The State Premiers were invited to conference after conference, and they were distinctly informed that the per capita system was to be brought to an end; but instead of coming to the last conference with a definite statement as to how the States would fare, and with a definite appeal to the Commonwealth Government, like sulky boys they sat back in their chairs and said “We have a moral right to the payments.” It was a childish attitude for them to take up.
– But that is no excuse for the Commonwealth injuring the States.
– This bill is not to injure_ the States. It is to bring them to their senses. When the State Treasurers meet the Commonwealth Ministers, the whole thing can be settled on a businesslike basis. Representatives of the same electors will be dealing with the problem.
I claim that the Government has public opinion behind it. There is no one in favour of the present system. No doubt Queensland will suffer, because its people are the highest taxed of all the States; but they will welcome a settlement of this question by the adoption of a businesslike arrangement. It seems to be the proper course to pass this bill and invite the Treasurers to come to that arrangement, and, as I can see no obstacle in the way of such an arrangement, I have no hesitation in casting my vote for the second reading of this bill.
– As the bill has been exhaustively discussed, I do not propose to go over the whole subject again, but, during the course of the debate, certain points have been raised to which I think I should make some reply. In the first place, there seems to be somemisapprehension about a statement made by the Honorary Minister (Senator McLachlan). When that honorable senator was asked whether the special grants for Tasmania and Western Australia could not be put in a separate bill, if this measure were defeated, he replied that they could. That is certainly so, but the Honorary Minister’s reply, I am sure, was not intended by him to be exhaustive ; it did not explain the whole position. The special grants to Western Australia and Tasmania, in such circumstances, could be included in a separate bill and submitted to this Parliament for approval, but not by the present Government. If done at all, that step would have to be taken by some other government. It is obvious that this measure constitutes an important portion of the Government’s financial policy, and if a vital amendment had been carried in another place the Government would have had no option but to resign. Equally if a request for such an amendment were carried in this chamber the Government would, of course, have to ask another place to reject it, and if it were made the Government would be defeated, and would have to resign. This would not be because of a desire on the part of the Government to make this a party question, but because of the inexorable rule which every self respecting government follows in respect of its financial proposals.
Let me answer at once an attack made by Senator Greene, who said that the Government had been guilty of a tactical blunder and had in some way damaged the party by introducing this bill. My reply is that this measure finds its place in the financial proposals of the Government after full consultation with both parties supporting the administration. Before it was brought before Parliament both parties supporting the Government were called together so that they might know what it was proposed to do, and only three of those present at that meeting took any exception to our proposal. The Government, therefore, had a right to assume that in bringing it forward it had behind it the overwhelming support of members of both parties. So much for that criticism. Another point was raised by Senator Carroll, who asked why the special grants to Western Australia and Tasmania found a place in this bill. I point out that in the Surplus Revenue Act of 1910 special provision was made for a grant to Western Australia. At that time no special grant was being paid to Tasmania, but if it had been it would also have been included in the bill. ‘ In that respect, therefore, we have only followed precedent. There has been a good deal of undue heat, and, if I may say so, much unnecessary eloquence, expended on the bill. It seems to me that one of the last to speak - Senator Sampson, who made, perhaps, one of the shortest speeches - put the whole question in a nutshell, when he saidthat from the people’s point of view it was largely a question of whether they should pay 10s. to each of two governmental authorities, or £1 to the one authority. The question at issue really resolves itself into that.
Senator Abbott, in criticizing Senator Greene in his second-reading speech, said -
Is Senator Greene, who is opposed to the bill, unmindful of the fact that in 1920-21 he was a member of the Hughes Ministry which advocated the withdrawal of the per capita grant?
– Did that not happen in 1920-21?
- Senator Abbott was referring to the proposal put forward in 1920, when the right honorable member for Balaclava (Mr. Watt), Senator Greene, and I were members of the same Cabinet. Senator Abbott continued -
Did Senator Greene say, “ Yes, I was a member of the Ministry in 1920-21 that resolved to withdraw the per capita payment, but I omitted to tell my leader or my electors in the north of New South Wales that I objected to the. proposal.” As a member of the Government of the day he must be supposed to have held the opinion that it was necessary to withdraw the per capita payment.
Senator Greene then interjected ;
I can give the honorable senator an explanation. The suggestion for the gradual withdrawal of the payments was not accepted, and I subsequently introduced a tariff which made the withdrawal unnecessary.
The facts are these: The tariff, which is now known as the Massy Greene tariff, was tabled on the 25th March, 1920, and duties were collected at the increased rates from that date. The Premiers’ conference, at which the right honorable member for North Sydney (Mr. Hughes), who was then Prime Minister, said he would carry out Mr. Watt’s proposal, sat from the21st to 25th May, 1920. It will, therefore, be seen that Senator Greene was under a misapprehension when he said that he “ subsequently “ introduced the tariff. When the conference was held at which these proposals were put forward, the tariff was actually in operation. I also wish to correct some of the figures put forward by Senator Greene in his personal explanation on Friday last. The Honorary Minister (Senator McLachlan) had challenged the statement made by him, that since the coming into office of the present Government taxation had increased by 12s.1d. per head of the population, and Senator Greene, in his personal explanation, said that the taxation per head in 1922-23 was ?8 13s. 4d. The honorable senator gave the total amount of taxation as ?49,855,017, and the population as 5,749,807. These figures, he said, had been obtained from the budget-papers. It is true that the figures quoted are published in the budget-papers, but Senator Greene made the serious mistake of taking the population figures for 1923-24. which show the population as at the 31st December, 1923.. for ascertaining the taxation per head for the previous year, 1922-23. The population, of course, was greater in 1923-24 than in 1922-23.. If Senator Greene had divided the taxation of 1922-23 by the number of people who actually paid those taxes he would have found the amount per head to be ?8 17s.1d., instead of ?8 13s. 4d., as stated by him - a difference of 3s. 9d. per head. In addition to adopting the wrong basis for ascertaining the taxation per head, the honorable senator was also wrong in his calculations. The second error is small, and would be scarcely worthy of notice if the honorable senator had not been endeavouring to give what purported to be the exact figures. He was endeavouring to show that the increase in taxation per head was 12s.1d. - an amount quoted by a right honorable member in another place. The Honorary Minister (Senator McLachlan) had already shown that the figures used in another place were wrong, and it is a remarkable coincidence that Senator Greene, working independently, obtained exactly the same result as that quoted in another place. Notwithstanding this, the honorable senator made a mistake of 3s. 9d. per head by adopting the wrong basis for his calculations.
– I do not agree that it is wrong ; I think the basis is correct.
– On the basis that the honorable senator adopted, his calculation shows an error of 2d. per head. There is also an error of 5d. per head in his calculations for 1926-27, even if we accept as correct his estimate of what our taxation will yield this year.
– The right honorable gentleman’s basis is wrong.
– I have only 30 minutes in which to reply–
– Why make an incorrect statement ?
– It is open to the honorable senator to make another personal explanation. I come now to the general debate, concerning which I have a few comments to make. The statement has been made on several occasions that the Senate represents the States. That, of course, is true; but what is meant by “ the States “ ? According to some honorable senators, it means, not the people of the States, but the Governments of the States. Let me remind those honorable senators that when the Constitution was drawn up, its framers largely followed that of the United
States of America as a guide. At that time in the United States of America senators were elected by the legislatures of the States. Had the framers of our Constitution intended that the Senate should represent the State Parliaments, and thereby the State Governments, is it not obvious that they would have adopted the American system of electing senators? They did not do that. They deliberately turned their backs on the American system, and provided that senators should be elected by the people of the States. It is idle, therefore, to say, on this or any other question, that the Senate should be guided by the opinion of State Governments, and that when an honorable senator does not adopt the view of the Government of the State he represents, he is acting contrary to the opinion of his State. Let me give one illustration of how ridiculous it would bo for us to assume that the State Governments in this matter speak on behalf of the people of the States. A while ago, when we were considering the imposition of taxation for the purpose of assisting States in the matter of road development, we imposed a tax on petrol. At that time, we were told iu the Senate and outside that we were acting against the interests of the States, because certain States objected to that proposal. The Government of Victoria refused to accept its share of the revenue obtained from the petrol tax, so that, if a3 some honorable senators argue, the State Governments speak for the States, Senator Guthrie, Senator Findley, and other Victorian senators, if they were doing their duty, should have voted against that tax. A few months afterwards, however, the State Government adopted a different attitude and decided to accept the money collected in that way. What would have been the position of these honorable senators had they adopted the view that they are here to represent the State Governments? It would then have been too late for them to put themselves right, and they would have been wrong in either case. It is clear that, in speaking of the responsibilities of the Senate in this way, some honorable senators are arguing on wrong premises.
I also wish to correct a statement made by Senator Lynch, who said that the per ca-pita system is in the interests of
Western Australia. Under the Surplus Revenue Act of 1910, the per capita payments to Now South Wales, from 19.16 to 1926, increased by £566,000, and in Victoria by £248,000, but in the same period the payments to Western Australia decreased by £7,866. If the per capita system is right, it should be applied in all cases where grants of money are made to the States. It should be applied in connexion with the roads grant, and also in connexion with advances for wire netting. Under the system adopted by the Government, Western Australia, with its vast area and heavy financial responsibilities, gets as much as Victoria, with its larger population, whereas, under the per capita system, Victoria would get four times as much as the western State. Notwithstanding this, Senator Lynch says that the per capita system favours Western Australia. The honorable senator also quoted a statement I made at Kalgoorlie to the effect that this Government would undertake that Western Australia should receive £450,000 above and beyond any arrangement made by the States iu the redistribution of the Commonwealth grants - this, by the way, is surely proof that I did indicate to the people that there would be some redistribution. What has the Government put before the Government and the people of Western Australia under this bill? We are providing for a special grant of £300,000, and we long ago put up to the State a proposal that was recommended by a section of the Western Australian Disabilities Royal Commission, as one of the best methods of assisting Western Australia, namely, that we should take over a portion of the northwestern territory, which represents a State liability of £150,000 a year. Those two sums are equivalent to the amount that I then outlined.
– The Minister is confounding two different propositions.
– It does not matter whether there are two or six propositions. Senator Lynch was in error when he said that the total war liabilities of the Commonwealth amounted to only £17,000,000 per annum. If the honorable senator will turn to the statement of the receipts and expenditure of the Commonwealth which, I remind him, are the official figures audited by the Auditor-General, so that there can be no mistake about them, he will see that interest and sinking fund on the war debt, war pensions, repatriation and other war services - in other words, war liabilities- amount to ?29,219,000.
– Is it not a fact that the special grants to Tasmania and Western Australia were agreed to by the Government before this bill was brought before members in the party rooms ?
– Yes. Senator Ogden, claiming a moral superiority, which I remind him is somewhat irritating to other honorable senators, seeing that we do not agree that he possesses all the virtues and his colleagues none, said that the Government had made a party question of this bill.
– I do not claim any moral superiority.
– The Government necessarily makes a party question of its financial measures, but I point out that the Government gives to its supporters a. liberty that the Labour party does not grant to its members. The division lists in another place, as well as in this Senate, show that Government supporters have voted against this bill ; but, notwithstanding that in this Senate we heard from Senator Grant what was probably one of the strongest speeches in support of the bill, no member of the Labour party voted in favour of it.
I desire now to refer to the point raised by Senator Needham, that at the last conference Mr. Bruce would entertain no other proposal than that submitted by him. As other honorable senators repeated the statement, I shall read from the official report of the conference. Under the heading “ Commonwealth Proposals “ we find the following -
As the nearest approach now practicable towards the ideal solution, the Federal Government proposes -
These proposals offer a satisfactory basis for a definite and final determination of the present unsound system of capitation payments with its accompanying duplication of income taxes.
After giving details of various proposals, the statement concluded -
It is recognized that the problem to be solved is difficult. It must, however, be solved in the interests of both Commonwealth and States. It is most desirable that the solution should be reached by agreement, and it is with that object that the Commonwealth Government, instead of proceeding direct to legislative action, invites the States to give these proposals their most careful consideration.
On page 28 of the report, Mr. Bruce is reported to have said -
We have now reached the point when this question has again to be considered, and the Commonwealth Government has asked the Premiers of the States to come here and discuss it with them. Of course, I recognize that this question of per capita payments to the States is one entirely within the discretion of the Commonwealth Parliament. But I think it is essential that the State representatives should come here and be afforded an opportunity to discuss any proposals which may bo put forward by the Commonwealth.
The Prime Minister also said -
We are trying to bring about the change with the least possible dislocation of the finances of the States, and we have been reasonably generous in our proposals to obviate the States being placed in an embarrassing position. Therefore, we ask the State Premiers to co-operate with us.
I draw Senator Needham’s attention to the next sentence -
If they can suggest a better, more efficient and easier way of doing what we propose, we shall bo only too pleased to listen to them, and to have their assistance.
At the end of the second day of the conference, Mr. McCormack said : -
Mr. McCORMACK. ; I do not question the morality of the present Commonwealth Government in the matter. The proposals may appear quite sound to the Government of which the Prime Minister is the head, but from the point of view of the States, they constitute a breach of a moral understanding or contract entered into at the time of federation. The question is whether the people of Aus tralia at the present time consider that there is a moral obligation upon the Commonwealth Government to hand over portion of the Customs revenue to the States.
Mr. BRUCE. ;That is the very point I have been trying to make. The Commonwealth has put forward certain proposals, and listening to the speeches made by the Premiers this afternoon, I have gathered that the Commonwealth action is being challenged on the ground that something is being done which is morally wrong, and opposed to the right of the States under the federation.
Mr. McCORMACK. We believe that, under the general terms of the Constitution, the States have a right to participate in the Customs revenue.
To indicate the feeling of the Premiers as to the attitude of Mr. Bruce, I desire to quote from the remarks of Mr. Allan, the Premier of Victoria, when seconding a vote of thanks to Mr. Bruce -
We are also grateful for the way in which you have presided over the proceedings because you have not taken up a standanddeliver attitude, such as,I regret to say, was adopted on a previous occasion, and which must always result in a deadlock.
It will be seen that every opportunity was given to the States, not only to consider the proposals of the Commonwealth, but also to submit alternative proposals.
– But they put forward nothing.
– That is so. They merely rested on their “moral right.” That being so, can the States now complain when this Parliament is proceeding in accordance with its undoubted right under the Constitution to take what action it thinks fit in relation to the per capita payments ? That right was exercised by the Commonwealth Parliament in 1910. The Government recognizes that it is not desirable, in the interest of either the Commonwealth or the States, that the States should be disregarded, flouted, or bludgeoned, and for that reason it is now saying to the States that, while the Commonwealth Parliament is determined to end the existing system, the Commonwealth is still willing to meet the States in conference to discuss any alternative scheme that may be put forward by them. When the Government’s proposals were first placed before the States, the State Premiers said that the figures submitted were wrong; but when asked to agree to the examination of those figures by experts they would not do so. The
Commonwealth Government is now saying to the States, “Come, let us reason together, with a view to arriving at the best arrangement possible in the interests of the Commonwealth and the States.”
– What will happen if the States maintain the attitude that they are not prepared to relinquish their share of the Customs revenue.
– With the passing of this bill, that share goes from them. Seeing that the Commonwealth’s obligations exceed ?50,000,000 per annum, and that the Customs and excise revenue is a little over ?40,000,000 per annum, the argument that the States are still entitled to a share in the Customs revenue is, in my opinion, humbug and nonsense. The States would be foolish to maintain the attitude they adopted on the occasion of the last conference. I do not think that they will take that stand again, but that they will come to the conference in a reasonable frame of mind, prepared to submit alternative proposals. It is significant that when at the last conference it was suggested that State officers should examine the Commonwealth figures which had been criticized, one Premier admitted that he had not brought with him any officer capable of examining the figures. Evidently, he intended that there should be no examination. I hope that the bill will be passed, and that when the States meet the Commonwealth in conference a spirit of harmony will be manifest, and that results satisfactory to all will accrue.
Question - That the bill be now read a second time - put. The Senate divided.
Majority . . . . 10
Question so resolved in the affirmative.
Bill read a second time.
This act may be cited as the States Grants Act 1927.
.- I am sorry, Senator Duncan, that you are in the chair while this clause is under discussion, becauseI believe that, if given the opportunity, your voice would be heard in opposition to it. It is not usual to discuss the first clause of a bill, but this is such a most unusual measure that I wish the committee to consider the advisableness of making some alteration to the title.
Senatorkingsmill. - Short title.
– As a rule, the title of a bill clearly indicates its purpose, but this title is misleading. It would convey the impression that the Government proposes to grant financial assistance to the several States of the Commonwealth. That is not the purpose of the bill, so the title should be altered. Western Australia and Tasmania will receive grants under this bill, but no other State will be in that position. The committee would be well advised to give this clause careful consideration, because, if it is passed in its present form, itwill not be so convenient to alter subsequent provisions of the measure.
– What is wrong with the title?
– There is nothing right about it, because the bill does not propose to grant financial assistance to States other than Western Australia and Tasmania. Of course, one would not expect Senator Payne to be perturbed about the title of the bill. His State and Western Australia will benefit financially under it, but other States will have payments taken away from them. I suggest that the Government should agree to a postponement of the clause until the other provisions have been dealtwith. Before the motion for the second reading was carried I heard strong opposition voiced by certain honorable senators opposite to the title of the bill. I hope, therefore, that the committee will not hastily pass this clause. Therewould be more prospect of harmonious discussion at the proposed conference between the Commonwealth and the States if the title were altered. Harmony at that gathering would be most desirable, because, if one may judge from assurances given by the responsible Ministers, the conference will pretty well settle the problem of the per capita grants, if not for a considerable length of time, then at least for the lifetime of this Government.
– Cannot the honorable senator suggest a desirable amendment of the short title.
– I rose without having a definite proposalin my mind, so that I shall be glad to receive suggestions from honorable senators. Like me, they are unable to do it on the spur of the moment. It is a matter that requires thinking out. The probabilities are that the framers of the bill expended a lot of time onthe decision of its title. Those gentlemen have been born and reared in a legal atmosphere. It is their business to give appropriate titles to bills. They have an intimate knowledge of draftsmanship. Since the inception of the Commonwealth they have been responsible for the submission of innumerable bills, each containing a short title. In 99 cases out of 100 the title suggested is agreed to with little or no discussion.
– The honorable senator’s time has expired.
– I have no hesitation in opposing the title of the bill, and I move as an amendment -
That the word “ Grants “ be left out with a view to insert in lieu thereof the word “ Burglary.”
The short title will then read, “The States Burglary Act.” I contend that in essence and in fact the bill has been wrongly named. Senator Pearce interjected a moment ago that it proposes to make grants to the States, and he instanced clause 6. That clause does not say that this is a measure to make a grant to the States. It reads -
Subject to the terms of any agreement made between the Commonwealth and all the States, and adopted by the Parliament, the Treasurer shall, during the financial year commencing on the 1st day of July, 1927- do certain things. The clause has no relation to the title, in so far as it purports to make this a States Grants Act. There is certainly a reference to grants to the States of Western Australia and Tasmania. I point out to the committee that if the hill becomes an act it will lessen the income of the States, notwithstanding the fact that grants may continue to be made in one form or another. The point I wish to stress is that, under this proposal, the States will not receive an equivalent of the per capita payments. There is not the slightest doubt that this is one of the vital clauses of the measure, l t has been argued that those who oppose the bill speak as the representatives noi of the States, but of the governments of the States. We have listened this afternoon to a lecturette on our constitutional position. If my amendment were submitted to the people, I venture to think that it would be carried. We who oppose the bill do not claim to voice the opinions of only the governments of the States. An opportunity has not been given to the people we represent to express their views respecting it. In my opinion the word “ Grants “ wrongly appears in the title, and a more suitable word would be “Burglary.” The Commonwealth Treasurer proposes to enter th’e States household, rob it of its ready cash and leave it with a few shillings to carry on; just as a burglar would take all the money and jewellery he could find, and leave behind him only the price of a tram fare. It is idle to say that the Commonwealth is not proposing to rob the States of the benefits which they now enjoy, and to curtail to a great extent the special grants that certain States at present receive. Clause 3 sets out that there is to be a curtailment of existing grants. That is a breach of the promise which the Government made when appealing to the people in 1925. Senator Pearce has stated that the payment of £450,000 to Western Australia is to be continued in two ways.
– I rise to order. Is the honorable senator in order in proceeding to reply to a speech that I made on the motion for the second reading of the bill, dealing particularly with the grant to Western Australia, which is specifically provided for in a clause other than that which the committee is now considering ?
– I ask the honorable senator to confine himself to clause 1. The grants that are to be payable to the State of Western Australia may be discussed when the committee is considering clause 3.
– I dare say that I deviated slightly from the question before the chair ; but I contend that, as a result of the operation of this measure, the State which I represent will suffer in respect to the grant that it receives. It proposes to fix the grant to Western Australia at £300,000, whereas under a former proposal the amount was £450,000.
– The honorable senator is not in order in discussing that matter on this clause.
– No clause of the bill furnishes a reason for entitling it, “the States Grants Act.” There are numerous words in the dictionary that would more aptly and correctly describe it. I agree with Senator Findley that if we agreed to the title without protest we should in a sense signify our acceptance of the following clauses. The title embraces the whole purport of the bill. As has already been stated, it is not customary to discuss the title of the measure; but it is necessary to express our opinion in this case, because our acceptance of the title would indicate agreement with every provision that follows. I commend the amendment to honorable senators.
– I cannot accept the amendment in its present form. It is, I consider, frivolous, and not relevant to the” bill.
Clause agreed to.
Clause 2- (Repeal of sections 4-7 of the Surplus Revenue Act 1910).
– This is one of the most important clauses of the bill, and if agreed to will have a very undesirable effect upon, at least, the State of New South
Wales. Section 4 of the Surplus Revenue Act of 1910 reads -
The Commonwealth shall, during the period of ten years, beginning on the 1st day of July, 1.91.0, and thereafter until the Parliament otherwise provides, pay to each State by monthly instalments, ov apply to the payment of interest on debts of the State taken over by the Commonwealth, an annual sum amounting to 25s. per head of the number of the people of the State.
Under tlie per capita system the amounts received by the respective States last year were -
If this bill is agreed to none of the States will be entitled, under that section, to receive any sum. The States of New South Wales, Victoria, Queensland, and South Australia will lose between them £6,9S3,S73. I believe that, by certain clauses of the bill, itis intended to substantially recompense some of the other States’. I fail to see why the State of New South Wales should be thus treated. It is very rarely indeed that representatives of that State complain of the distribution of Federal revenue; but this, I think, is one of those occasions when strong exception should be taken to the proposal to withdraw the per capita payment from the State while provision is made in other clauses to continue special payments to other States. If the bill stopped at clause 2 it would mean the total abolition of the per capita payments, leaving to the States the right to tax themselves and find their own revenue.
– It is a right that the State of New South Wales has been exercising very freely of late.
-This is the first time to my knowledge any honorable senator from New South Wales has objected to special payments to other States. We have- agreed, without any comment worth mentioning, to an impost of about £6,000,000 a year to maintain the sugar industry of Queensland, and with very mild protest now and again we have agreed to the payment of doles to Western Australia and Tasmania.
– Yes, doles, which, so I am told, sap the marrow out of the backbone of the people who get them. It is generally recognized that the payment of money to any person who gives nothing in return has a very damaging effect on his moral fibre. I realize quite well that the bone of contention all along has been the distribution of the spoils collected at the Customs house.
– We have heard all about that.
– But I want to say it again, because I cannot shut my eyes to the fact that, while the supporters of the Government masquerade as protectionists, they are, like Senator Thompson, only high revenue tariffists
– The honorable senator must confine his remarks to the clause.
– If the bill stopped at clause 2, it would deal out at least even-handed treatment, if not justice, to all the States; but it does not do so. There are other provisions which destroy the effect of this clause, but I shall have another opportunity to deal with them. In the meantime, I protest against the proposal to rob New South Wales of £2,978,343 during the current financial year.
– This, of course, is the provision of the bill to which I take exception, and I shall vote against it; but I should like to point out that many things have been said during this debate which I regret had to be said. I regret the manner in which Senator Pearce has approached the matter, and that he should have taken it that I spoke with bitterness. I can assure him that I did not. If he will cast his memory back to the events of 1919-20, when it was decided to place before the States tentative proposals for the reduction of the per ca/pita payment. Senator Pearce will remember that those proposals were put forward in a way entirely different from that in which those now before us have been made. He will also recall the fact that when the matter was definitely turned down by the States, and the Government found that the Customs revenue would be sufficient for its purpose, it was entirely dropped. Mr. Brace’s statement of 1922 embodied the definite policy of the Government, and. therefore, it is not I who have changed. I still stand where I have always stood in this matter. What are the reasons that have been advanced for the change? The only reason that amounts to anything is the claim that the Government that raises revenue should spend it. A little while ago, the Honorary Minister (Senator McLachlan) said that he regarded this as a matter of abstract right. When we elect to stand on a principle as an abstract right, we cannot follow it and depart from it at one and the same time. lt is, apparently, the one principle upon which the Government stands, as an abstract right, and, if that is so, I maintain that it . cannot make grants to any State. But we have always realized that States situated like Western Australia and Tasmania, are entitled to receive some further consideration from the Federal Parliament than the per capita payment. After all, the present system is simply a basis of payment in which all the States share; and to the amount so distributed the Federal Parliament has added, in the case of several States, amounts that it has thought justified by their special circumstances. To that extent, therefore, the Government lias departed from the per capita basis. I do not want to say anything more on the matter. I have taken a very definite stand against this proposal, and I think Senator Pearce will do me the justice of saying that I have opposed it vigorously and as well as I was able to do, both inside and outside Parliament, ever since it was first suggested by the Government. I have not varied in my opposition, because I think the proposal is wrong and that is why I arn voting against the Government on this issue.
.- The withdrawal of £2,978,343 from New South Wales will throw upon the Government of that State the necessity of imposing taxation sufficiently heavy to enable it to recover a somewhat similar amount. But I should like to know why the States of New South Wales, South Australia, Victoria, and Queensland are singled out for this invidious treatment, while other provisions in the bill provide Tasmania and Western Australia with very substantial sums. The
State of New South Wales looks to the per capita payment year after year, for portion of its revenue, and while it may be all right to deprive it of this money if all the States are treated alike, I ask Senator Pearce to explain why four States are singled out for this treatment, and others are not similarly treated.
.- I am bound to invite a division on this clause, which repeals those sections of the Surplus Revenue Act 1910, that provide for the capitation payment to the States. I base my opposition on the fact that the Government has provided no alternative, but simply asks us to trust it to make what terms it chooses if the States are not satisfied to meet the Commonwealth Ministers in conference. Is it fair, I ask, to place in the hands of the Commonwealth Government such a mighty weapon? And even if the States do meet the Commonwealth in conference, after the abolition of the capitation grant, they will be at a distinct disadvantage. The Federal Treasurer, armed with this legislation, will have a clear field, and if he chooses - I do not say he would - he can coerce the States. We must assume that any future proposals of the Treasurer will embody generally those which he submitted to us last session, when he proposed that the Commonwealth should vacate 40 per cent, of the field of income taxation, and give up the Commonwealth land tax, the Commonwealth amusement tax, and the Commonwealth estate duties. I am certain that, under such an arrangement - I am speaking largely on calculations of State officials^ - these sources of revenue would not enable the States to receive that amount of revenue which is collected by the Federal authorities. Senator Pearce tells us that our opposition to the bill is based upon the fact that we are following the State Governments instead of the voice of the people of the States. He is assuming that the people of the States are not opposed to the Government’s proposals or that they are not taking ‘sufficient interest in them. I am not considering the position of the State Governments; but expressing what I believe to be the general opinion of the people that these proposals will result in heavier taxation. Tasmania has already the highest direct taxation per head of any State in the Commonwealth.
– That is not so.
– I have not the latest figures at hand; but I am safe in saying that, based on the capacity of the people, Tasmania’s taxation per head is higher than that of any other State. The Tasmanian people cannot bear heavier taxation. Tasmania recorded a larger majority in favour of federation than any other State, and has always been loyal to the federation, and to the Federal governments which have held office.
– Why should the Commonwealth continue to tax the people of Tasmania through the Customs and hand over the revenue so obtained to the State Government?
– It is not a matter of how the revenue is obtained, but of how the States are to be recompensed if the per capita payment is abolished. Doe3 it matter if the revenue is raised in the form of Customs and excise duties, or in the form of direct taxation? It is better to collect revenue from direct taxation.
– The State Governments have full power to do that.
– Yes; but they will have no guarantee that the field of direct taxation will be left solely to them. I can imagine Senator Grant, for instance, as treasurer of a Labour government, advocating the reimposition of a Federal land tax. Tasmania and Western Australia are in a worse position than any of the other States. During the last calendar year approximately 2,000 ablebodied persons, many of whom had been educated and trained in Tasmania, settled on the mainland.
– Then Tasmania will receive less in this financial year than was received last year.
– The Minister said that in the case of the two smaller States the per capita payment had remained stationary, and that in two of the larger States it had increased. Surely the Minister can see that those States whose population is increasing will benefit equally under .the proposed system as they would under the present arrangement. When a State loses an able-bodied taxpayer it. is deprived of his producing capacity, as well as of approximately £2 per annum which he would pay in taxation. As the population of Victoria, New South Wales, and Queensland is increasing, those States will benefit under the proposals of the Government, and will probably receive more than they would under the per capita system. I am afraid that if this measure becomes law the State Treasurers will have to raise additional taxation, and that Tasmania will be further penalized. I regard the duties of the Senate as sacred. I wish the Constitution to be preserved and the close federation of the States adhered to. I do not wish to lessen the influence and prestige of this Chamber. I want it to be a strong and virile branch of the legislature, and one which is respected and admired by the people. But if Ave act in a way which is contrary to the welfare of the various component parts- of tlie Commonwealth, we shall, as the late Sir Edmund Barton said during the convention debate, “ threaten the solidity of this great federation.”
– Does the honorable senator think that the division this afternoon will assist in that direction ?
– Yes. If we seriously weaken the sovereign powers, and interfere with the self-governing rights of the States, we are tending towards a” loose confederacy. Whether we admit it or not, there is nothing so likely to lead to the much-desired goal of unification as the proposals before us. Nothing can assist the Labour party more in that direction than this proposal, which a majority of honorable senators are supporting. The present Treasurer said some years ago that he believed in unification. I do not say that that is his objective today, but the whole trend of federal legislation and effort is in the direction of making the Commonwealth the dominant financial power. The States have equally important functions to fulfil. I know this clause will be carried, but I am voicing my strong protest - not on party grounds - against an action which I believe will antagonize tlie States, and make it necessary for them to impose higher taxation which the people, par- ticularly those in the smaller States, cannot afford to pay.
– I trust the committee will reject this clause, which contains the vital principle of the bill. Although a majority of honorable senators have supported the second reading of the measure, we should not refrain from directing attention to its objectionable features. It has been said that if this clause is passed one State in particular will suffer, but I believe it will be detrimental to all the States. The clause reads -
Sections four, five, six and seven of the Surplus Revenue Act 1910 are repealed as from the thirtieth day of June, One thousand nine hundred and twenty-seven.
Section 4 of the Surplus Revenue Act, which is to be repealed, deals specifically with the payment of 25s. per capita to the States, which this clause provides, shall cease as from the 30th June of this year. It is interesting to note that the Minister (Senator Pearce), who in 1910 made a definite statement to the people of Western Australia that he favoured the continuation of the per capita payments for 25 years from 1910, is now assisting in their abolition. A contract between the Commonwealth and the States is being broken, or if it is not, a. distinct departure is being made from the spirit of federation. I do not think it was ever intended that a system such as this should ever be introduced. Even if the States have no legal or moral right to these payments, the Government should postpone consideration of the measure until June of this year, and in the meantime hold a conference of Commonwealth and State Treasurers. I cannot see the justice of determining this matter now. Despite all that has been said, and the quotations read by the Minister from the minutes of the conference recently held, at which the Commonwealth submitted proposals similar to those which we are now discussing, the State Premiers have not had an opportunity to submit a modified scheme. The Commonwealth proposal was of such a nature . that State representatives were appalled, and since then have not had an opportunity to submit an alternative proposal. The per capita payment is to be abolished. That having been done, the States will bc compelled to confer with the Common wealth. A conference held under compulsion is not likely to be so productive of good results as one in which the parties come together voluntarily. Instead of acting as it has done, the Commonwealth should have told the States that, while it intended to introduce legislation to abolish the per capita payments, a conference should first be held to discuss the whole question. ‘ At one stage, the Government proposed to appoint a royal commission to inquire into the disabilities of the States, but in view of the opposition of the States it abandoned that idea. But it decided to proceed with this bill. The Government’s actions are not calculated to promote good feeling between the Commonwealth and the States. At the conference which it is proposed shall take place the Commonwealth will be able to say to the States, “ Take what is offered, or leave it.” The States will have to be satisfied with the crumbs which fall from the table of the Commonwealth. For the future welfare of the Commonwealth and the States there should be harmony between their representatives, but the actions of the Government are calculated to cause friction, which will react against the best interests of both. I hope, therefore, that the committee will reject the clause, thus opening the way for a conference between the two authorities before the per capita payments are abolished.
.- I should not have risen had it not been for the statement made during the debate that honorable senators who oppose this bill do so because of the influence exercised by the various State Governments. I am a representative of Victoria, in which State there is in power a government which has lost no opportunity to denounce the party with which I am associated. Every candidate for election to the Victorian Parliament, irrespective of party, is, I believe, opposed to the withdrawal of the per capita payments. Some honorable senators representing Victoria have spoken in favour of the bill; but if they were candidates for election to the State Parliament they would be rejected by the electors.
– It is not safe to prophesy.
– It is rare that such unanimity among members of all political parties is found, but there is no question that the opposition to this bill comes from all parties. The Government says that, if this measure becomes law, it will see that the States are not injured. What Government can guarantee a permanent and satisfactory settlement of the serious financial difficulties now confronting the Commonwealth and the States? I remind honorable senators that that which this Government may do to-day may be undone to-morrow by another Government. The Bruce-Page Government cannot bind the people of Australia for all time; nor can the present State Premiers bind the people of the States. It has been said that, because of certain other proposals which the Government intends to bring forward, the passing of this measure will place no great burden on the States. So far we do not know what those proposals are. The per capita payments are to continue until the 30th June, 1927.
– Unless an agreement is arrived at in the meantime, payments will continue to be made to the States, but not as per capita grants until 30th June, 1928.
– By the 30th June, 1928, this Parliament will have approached the end of the period for which it was elected; a general election will not be far off. The Government proposes to appoint a committee to consider constitutional matters. I remind honorable senators that not long ago some proposals submitted to the people by the Government were defeated, largely because the electors disapproved of the Government’s proposals in relation to the per capita payments. Many electors believed that if they voted for the Government’s referendum proposals they would be voting for the abolition of the per capita payments. That was a wrong belief, it is true, nevertheless, it had a considerable effect on the result of the a ppeal.
– The Government did much to kill its own proposals.
– The Government now proposes to take away the per capita grant, and then to ask the States to meet the Commonwealth in conference. When, in another place, it was pointed out that that was not the way to promote harmony between the Commonwealth and the States, the Treasurer (Dr. Earle Page) said that at the conference there would be an open field, and that whatever decisions were arrived at would be submitted to Parliament later. He even went so far as to say that the result might be the restoration of the per capita payments to the States. Senator Ogden said that the Government’s proposals would impose an additional burden on the taxpayers of Tasmania. That will be true also of Victoria. I shall endeavour to show how the Government proposal will mean additional taxation and heavier burdens on that section of the community which I represent in this chamber, namely, the working class. Senator Givens said that as the States had authority to raise all the revenues they required in their own way, they should look after their own finances, and should not rely upon the Commonwealth Government for any payments. Does he approve of the Government’s advances for wire netting, of its road scheme, or its proposal to spend £20,000,000 on a housing scheme ?
– I am not in favour of any of those proposals.
– Nevertheless, the honorable senator is a supporter of this Government. I am not speaking as a representative of the Government of Victoria. I am doing all I can to bring about the defeat of that Government at the coming election. I am opposing the bill because I object to its principle, and because I believe it will mean an additional taxation burden on the working classes. The Government proposes to evacuate certain fields of direct taxation. It proposes to drop the federal land tax, but it will hold on to 60 per cent.ofthe income tax, so that there will still be direct taxation by the Commonwealth.
– And two taxgathering authorities.
– There will be a federal income tax; but, if this measure is carried, there will be no federal land tax.
Question - That the clause stand as printed - put. The Committee divided.
Majority . . . . 6
Question so resolved in the affirmative.
Clause agreed to.
Sitting suspended from 6.37to8p.m.
Clause 3 - (1.) There shall be payable to the State of Western Australia, in equal monthly instalments, during the period of five years commencing on the first day of July, One thousand nine hundred and twenty-six, the sum of Three hundred thousand pounds per annum. (2.) All sums paid to the State of Western Australia during the period from the first day of July One thousand nine hundred and twenty-six to the thirtieth day of June One thousandninehundred and twenty-seven, in pursuance of section five of the Surplus Revenue Act 1910, shall be deemed tohave been payments made to that State in fulfilment of the obligations of the Commonwealth to that State under sub-section (1.) of this section in respect of that period.
– I move -
That the words “ three hundred,” line 6, be left out, with a view to insert in lieu thereof the words “ Four hundred and fifty.”
– The honorable senator must move that the House of Representatives be requested to make the amendment he desires to have made.
– Then I move-
That the House of Representatives be requested to amend the clause by leaving out the words “ Three hundred,” line 6, with a view to insert in lieu thereof the words “ Four hundred and fifty.”
During the Federal elections in 1925 the Government, through its mouth-piece (Senator Pearce) promised that, as a result of the findings of the royal commission which was appointed to inquire into the disabilities of Western Australia arising out of federation, the sum of £450,000 would be paid as compensation to that State for one year. The Minister added, “ As to whether or not that amount will be continued will be determined by a conference of State Treasurers.” Western Australia has received only one payment of £450,000, and so far the Treasurers of the States have not been called together to decide whether or not the Commonwealth should continue to pay that amount. That it was the intention of the Government to include it in this bill is indicated by statements that have been made by the Treasurer (Dr. Earle Page). He is reported to have said that the amount of £450,000 for Western Australia, and that of £378,000 for Tasmania, represented the assistance to be given to those States. When the honorable gentleman was asked, “ How can the position of Western Australia be made better by giving that State £152,000 for a loss of £188,000?” he replied, “ We have made provision for a special grant of £450,000 to Western Australia.” . He was then asked whether that was apart from the provision in the bill, and he replied, “ It will be remembered that when the grant of £450,000 was proposed early this year, the diminishing grant of £97,000 was to be subtracted.” Therefore, the total amount to be voted to Western Australia this year was £363,000. He went further, and said that an adjustment would be made and included in this measure. I have in my hand a statement entitled, “ Separation of Commonwealth and State Finances. Table Showing Effect of Commonwealth Proposals.” Under the heading, “ Adjusting Grants and Special Assistance,” it states: “ The full amount of £450,000 is accordingly included in column 10, and the deduction of £87,000 has been allowed for adjusting purposes.” I contend that the full amount of £450,000 should stand, independently of the abolition of the per capita payment. Whilst there was no mandate from the people of Australia to abolish the per capita payment, there was a definite statement by Senator Pearce, in Western Australia, that £450,000 would be given for one year, and that then there would be an inquiry by the Treasurers of the States. The right honorable gentleman added to that statement later, when he said that Western Australia would not be treated less generously in the event of the finding of the State Treasurers not being in accordance with that of the com.missi.on. The point I wish to stress is that a royal commission was appointed to ascertain whether or not Western Australia was suffering as the result of federation. It found that the State had suffered, and was suffering, by reason of the disabilities imposed upon it under federation. There was a majority and also a minority report. The former recommended that the sum of £450,000 per annum should be paid for a period of 25 years; and the latter suggested that the amount should be £300,000. It appears to me that for election purposes the Government adopted the majority report, and that for the purposes of this bill it is adopting the report of the minority. The object of my requested amendment is to have the amount recommended by the majority of the commission continued when the per capita payment is abolished, less the diminishing amount of the special grant.
– The Government cannot accept the requested amendment, and if it is carried will have to ask another place not to make it. It would certainly destroy the bill, and subsequent happenings would be on the lap of the gods. The following is the statement which I made in Perth when outlining the policy of the Government and I had the authority of the Government for making it. It is taken from the West Australian of the 9th October, 1925-
The Commonwealth Government, after fully considering the position, has decided to ask Parliament for authority to make a special grant this year to Western Australia of £450,000, which will be inclusive of the grant now paid.
That statement, to any intelligent person, cannot have a doubtful meaning. I was applauded, which is a proof that it was not unpalatable to my audience. I continued -
Although this proposal is made for this year only, pending the holding of the conference with the State’ Governments on Federal and State financial relations, to which I have already referred, it is a recognition and an admission by the Commonwealth Government that the findings of the Royal Commission justify Western Australia receiving that amount of financial compensation, and it therefore establishes a basis upon which any decision as to future financial relationships shall rest - (Applause). The amount of £450,000 is not granted for the purpose of being splashed up on State enterprises or political adventures - (Loud applause). The Commonwealth Government expects that it will be used to give relief in the directions indicated by the commission to those industries which it has been proved are suffering from the tariff or from other conditions of federation that adversely effect Western Australia. One of these disabilities, the commission points out, is the present high rate of State income tax, particularly on the higher incomes, which is undoubtedly driving capital out of the State.
Later, I repeated that statement at Kalgoorlie, and added that, apart from any financial arrangements the Commonwealth might make with the States, Western Australia needed, and must receive, £450,000 a year inclusive of the . special grant. This is a result of the appointment of the Disabilities Royal Commission by the present Government. It does not follow that when a commission is appointed a government is bound to advise Parliament to accept the methods it may propose for giving relief. In this case the Government did not follow the exact methods by which the commission recommended that relief should bc given. Any honorable senator who reads the report and the findings of the commission will recognize immediately that the mere giving of a grant of money to Western Australia is not the best method for relieving that State of her heavy financial liabilities. Right through the report will be found references to the fact that one of the chief disabilities of Western Australia is the vast territory that she has to administer and govern with a handful of people. One of the commissioners went so far as to recommend as a partial remedy that the Commonwealth should assume financial liability for the territory in the north-west of Western Australia. The calculation of the amount of relief that would bo given to Western Australia, if that were done, is the calculation of the Under-Treasurer of i iic State, not of the Commonwealth Treasurer. The figure which he stated before ( lie commission was £150,000 per annum. In addition to undertaking to pay thi3 grant of £300,000 inclusive oi’ the diminishing grant to which Western Australia is entitled, the Commonwealth Government offered to take over the northwestern territory of Western Australia, down to the 26th parallel of south latitude. To that the Western. Australian Government has demurred, but it has expressed its willingness to discuss the question of the Commonwealth Government taking over the north-west territory, down to the 20th parallel of south latitude.
– That is quite fi good proposal.
– The Commonwealth Government has replied that it is willing to negotiate the matter, and take over the territory clown to the 20th parallel of south latitude, and our information is that it would not make very much difference in the amount of financial relief given to Western Australia, because the greater amount of the liability of the State arises from government activities north of the 20th parallel of south latitude. The Commonwealth Government, therefore, has adopted the £450,000 recommendation of the majority of the Disabilities Commission, but it has said that it will give that relief in two directions, the first being a grant of £300,000 for five years, and the second the taking over and assumption of the obligations and debts appertaining to the north-western territory of the State, down to the 20th parallel of south latitude, and interest on the liabilities incurred amounting roughly to £150,000 a year. Seeing that the Western Australian Government is willing to negotiate on those terms, and seeing further that with the relief already given this year the Premier of tho State is able to announce a surplus for the year, it cannot be said that the Commonwealth is treating the State ungenerously. No State has the right to ask the Commonwealth Government to vote more money than is actually required to put it on a fair financial basis, unless it be a mendi cant State seeking charity. The Government believes that if Western Australia has a grant of £300,000 for five years, and the Commonwealth assumes the liability for the north-west territory referred to, the State will very soon be able to put its finances in order and need not seek relief from any other source. At any rate, the Government is doing justice to the State, and also to the finding of the royal commission, although not in exactly the way the commission has recommended. Five years hence I venture to say this Parliament will be as national iu its outlook as it is to-day, and can be trusted to deal fairly with the State if then the State is still in need of assistance. In these circumstances I ask the committee .not to endanger the grant or the bill by carrying an amendment, but to agree with ina that,, having regard to all the circumstances, and the .immediate necessity of the State, the Government has done substantial and fair justice to Western Australia.
– I intend to take two sporting chances, the chance of the amendment getting through the Senate, and the more serious chance of its not being sent back to us by the House of Representatives because we have exceeded our powers by seeking to amend a money bill. I have the liveliest as well as a pleasant recollection of the meeting to which Senator Pearce has alluded, because I was there, and I have the keenest recollection of the words he spoke, and the way in which they were received. I also fully indorse the action of the Wester n Australian Government in refusing to hand over to the tender cares of the Commonwealth the strip of country between the 20th and 26th parallels of south latitude. That, by the way, has not very much to do with the amendment, but I simply rose to say that I shall take these two sporting chances. If the State of Western Australia is dependent on the extra money, I should advise it to sell its chance if it can find a buyer. I intend to support the amendment for the reasons I have stated. As a matter- of fact I do not suppose the honorable senator who moved it had any idea that the Government would accept it, and if he did he had uo reason to believe that the Senate would pass it.
– In his endeavour to show why it was dangerous to give the States so much money Senator McLachlan read a list of socialistic enterprises into which he said the various State had entered with the result that they had lost quite a lot of money. Among other enterprises he mentioned the Wyndham Meat Works of Western Australia, which he said had lost something in the neighbourhood of £500,000. But these meat works cannot be classed by any fair-minded man as a socialistic enterprise in the ordinary sense, because they were established by the Government of the day as an honest effort to provide means to find a market for the stock of small squatters in the Kimberly district. There were quite a number of small cattle-raisers in East Kimberly who declared that they found it impossible to market their stock. The larger growers had a habit of procuring all the bookings on the limited shipping service available, and the small men were thus compelled to sacrifice their cattle on the spot, or let them roam at large on their runs. These meat works were established to meet that position. Unfortunately they have been run at a loss, but they have been of great assistance to men who could not be assisted in any other way. Therefore, Senator McLachlan can hardly class them as one of the socialistic schemes indulged in by State Governments. I want to do Senator Pearce the justice of saying that I also was at that meeting in Perth, to which he has referred, and that the statement he has read to-night is an absolutely correct report of what was said by him on that occasion. One member of the royal commission seemed to have come from the eastern State with the settled idea that the State had too much territory, and could not handle it all. He lost no opportunity during the inquiry to find out what the various witnesses thought about the wisdom of giving portion of the territory into the hands of the Commonwealth. Candidly the experience Australia has had of the administration of the Northern Territory is a very big factor in inducing the people of Western Australia to think that it would not be altogether wise to hand over any portion of their territory to the Commonwealth. We are certainly looking for an improvement in the ad ministration of the Northern Territory, but so far results have not been very encouraging.
– They think it would be a case of out of the frying pan into the fire.
– Yes; that is the view the people of Western Australia take. There is a great difference between the north-west of Western Australia and the northern part of South Australia, now known as the Northern Territory. Darwin and the Northern Territory generally, might just as well have been in New Zealand, so far as the people of Adelaide and the southern part of South Australia were concerned. In Western Australia we have a continuous and unbroken coast line from the southern portion of the State to the north-west. We have not one thousand or two thousand miles of very difficult country to traverse, as is said to be the case between Adelaide and Darwin. Consequently I do not think there is the same necessity to urge a division of Western Australia as there was for the division of South Australia. To that extent, therefore, I do not agree with the finding of the royal commission. In any case I think the matter should be referred to people in that part of Western Australia, who after all is said and done, have to abide by what is decided. They should be consulted as to what their future should be.
– The honorable senator wants a referendum of the people in the area as is provided for in the Constitution in regard to a new State.
– The honorable senator would have no objection to a subdivision if the people in the area desired it.
– No. I would be the last in the world to put anything in the way of their securing what they desired in that regard. The position is just like a State alienating its freehold. It does not part with the land; neither would the State, in a sense, be parting with the northern portion of its territory. But that does not effect the point that it is a matter that should be referred to the people in that particular area, and for that reason T support the amendment.
Senator NEEDHAM (Western Austra the Western Australian Disabilities did not mention anything about the desire or the offer of the Commonwealth Government to take over any part of the State. Senator Pearce has tried to cloud the issue by referring to something that eventuated in the minds of the Government afterwards, and for the sake of clarity I shall read the following from the report of the commission : -
That until the State of Western Australia is granted the right to impose its own Customs and excise tariffs, the Commonwealth shall pay to the State a special payment of £450,000’ per annum in addition to the 25s. per capita payment made in accordance with clause 4 of the Surplus Revenue Act of 1910, the aforesaid special payment to include the special annual payment now being made to the State of Western Australia in accordance with clause 5 of the said act. The above special payment of £450,000 to commence on the 1st July, 1924.
There is nothing in the majority report of the commission concerning the taking over by the Commonwealth of a portion of the north-west of Western Australia or to the financial grant to Western Australia being decreased by £150,000 on that account, as mentioned by the Minister.
– I did not say that the majority report of the Western Australia Disabilities Commission recommended the taking over of portion of the north-west of Western Australia.
– That was the inference to be drawn from the Minister’s statement, which was made with the intention of defeating my amendment. The Minister stated that an offer had been made to the State Government to take over the north-west portion of Western Australia, representing a liability, which, with the Commonwealth’s grant, would be equivalent to £450,000 per annum.
– I did not say that the majority report recommended that. It was mentioned by Mr. Simpson.
– The Minister was speaking of something which the commission did not recommend.
– The chairman of the commission did.
– I have quoted the majority report.
– I have not tried to misrepresent the position.
-The. minority report recommended -
That a special grant of £300,000 per annum be paid bv the Commonwealth to the State for a period of ten years, commencing on 1st July, 1924, the question of further assistance to be reviewed towards the end of that period. This recommendation is made on the assumption that the present capitation allowance of 25s. per head of population will continue for the same period of ten years, and on the further assumption that if the special’ grant of £300,000, as recommended, be made, the present diminishing special grant shall cease.
I have quoted the majority and the minority reports to show that such a proposal was not in the minds of the commissioners. When the Minister delivered his speech in the Queen’s Hall, Perth, no conditions were imposed as to how the State Government should spend the money. The commission inquired into the whole subject, but did not recommend the manner in which the money should be spent. The Minister did not at that time condemn the manner in which money was being spent on State enterprises in Western Australia, and, as mentioned by Senator Carroll, it cannot be said it is being wasted on the meatworks at Wyndham, or that that enterprise has been a failure. If it has been, why have previous governments not taken steps to discontinue it? The Treasurer definitely stated that the £450,000 would be paid after making allowance for the diminishing grant. If the committee agree to my requested amendment, Western Australia will still receive the grant, minus the diminishing amount. The Minister now says that the money should be spent in a certain way, and that it is not usual for a government always to accept the advice of a royal commission. If that is so, what is the use of appointing royal commissions ? This commisson, which was appointed by the Government, conducted an exhaustve inquiry, and valuable independent evidence was tendered. Majority and minority reports were made. For electioneering purposes, Senator Pearce, speaking in Perth in 1925, quoted the majority report. The Minister did not forget to mention the applause with which his remarks, according to the newspaper report quoted by him, were received.
– Showing that the people endorsed what he said.
– The people were not conversant with the subject. The Minister made it clear that for one year Western Australia would receive £450,000, and also that a conference of State Treasurers would be held. That conference has not yet been convened.
– Yes, it has.
– What did it decide ?
– That the States would adhere to “ moral right.”
– The conference to which the Minister referred has not been convened. The gathering to which the Minister is now alluding was one at which the general financial relations between the Commonwealth and the States were to be considered. The inference to bo drawn from the Minister’s speech was that the State Treasurers would meet to determine whether the” payment to Western Australia should be continued. The people of Western. Australia expected that to be done. It is not to be said that, because the Western Australian State Treasurer will possibly have this year a surplus of £45,000 or £50,000, the State does not need the financial assistance to which the coin.]1118810 U said it was entitled. I am relying upon the report of the commission which I have quoted, and expect the Government to honour its promise. Although it is proposed to abolish the per capita payment, Western Australia should receive a grant for a period of years, minus the diminishing amount.
– I do not intend to allow the Leader of the Opposition (Senator Needham) to get away with a deliberate attempt at misrepresentation.
– I rise to order. The words used by the Minister, “ deliberate attempt at misrepresentation,” are not only disorderly, but offensive, and I ask that they be withdrawn.
– If the word “ deliberate “ is offensive to the honorable senator, I withdraw it, and say that it was an unintentional attempt at misrepresentation. I ask honorable senators to read the report in order to sec whether I have stated the position correctly. In paragraph 19 of Mr. Entwistl’s and Mr. Mills’s report, in which they deal with the question of taking over the north-west portion of Western Australia, they do not make any recommendations, although they say that the Western Australian Government expects some pro posals to be submitted for consideration by the Commonwealth. In paragraph 20, however, the chairman, in the minority report, expresses dissent and recommends that the Government of the Commonwealth should invite the State Government of Western Australia to surrender to the Commonwealth that portion of the north-west of Western Australia north of the 26th parallel of south latitude, on the following terms: - («) That thu Commonwealth shall take over the sum of £3,080,231 of the public debt of the State of Western Australia, incurred on account of thu north-west to 30th June, J!>24.
That the Commonwealth shall under- take, within a period of twelve months after the surrender of the Territory, to create a new State of the said territory, granting such representation in cither House of the Commonwealth Parliament as the Parliament thinks fit.
Has not the Loader of the Opposition read that? There is a clear indication that a report was presented on that phase of the question. The honorable senator was equally incorrect when he said, perhaps unintentionally, that a conference of State Treasurers was not convened. I have before me a memorandum presented to the State Treasurers when the conference was convened, in which there i3 a proposal in regard to Western Australia and Tasmania, submitted for their consideration, and which the honorable senator must have received with his other parliamentary papers.
– I rise to order. I submit that this requested amendment is distinctly out of order. As I understand that the practice in committee is to refer points of order to the President or Deputy President for his ruling, I do not propose to give my reasons now, but shall do so later.
– It is the duty of the Chairman, or Temporary Chairman of
Committees, to give a ruling on points of order; but, if an honorable senator dissents from a ruling so given, the President then has to give his decision.
– That being so, I submit that it is not in order for the committee, by an indirect method such as is now proposed, to increase the appropriation under the bill. If honorable senators will refer to section 56 of the Constitution, they will find that a very definite provision is made in relation to’ appropriations governed by messages. That section reads -
A vote, resolution, or proposed law for the appropriation of revenue or moneys shall not bo passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General tothe House in which the proposal originated.
– This is not an appropriation bill.
– It is. If the Leader of the Opposition had served in another place, he would know that this bill must be founded on a message from the Governor-General. There is no other method by which it could be introduced. Such messages provide that a certain sum shall be appropriated. Another place cannot increase that appropriation. If this request were agreed to, what could the House of Representatives do? It could do nothing. The only course open to the Government would be to bring down another message from the GovernorGeneral and reintroduce the proposal in a new bill. I cannot see how it is possible for us to do anything effective in the manner proposed. The requested amendment ofthe Leader of the Opposition is, in my opinion, out of order.
– I am very glad that Senator Greene has raised this point of order, because if I had done so my motives might have been suspected. A similar question has arisen in this chamber on a previous occasion; and in a little booklet which has been issued to members, entitled Practice and Procedure on Appropriation, Taxation-, and Other Bills, I find on page 20 the following, which has application to the present case: -
The rule that no amendment can bemade in a bill by the Senate which would havethe effect of widening the area of proposed expenditure, and thus increasing a charge or burden on the people, was upheld by the
President in connexion with the Bounties Bill 1907-08 in the followingruling:-
The bill as received from the other House represented the requirements of the Crown, and must be so accepted without reference to the form in which it might have originally been presented to that House, and there was no power to make alterations that would have the effect of altering the destination of the grant sought or of creating another bounty.
The Senate, with certain exceptions under section 53 of the Constitution, had powers similar to those of the House of Representatives, and as this was such an amendment as that House could not make in the bill, he ruled that the Senate was restricted in the same manner, and the amendment was not in order.
It is clear that if this amendment were carried, it would increase the charge or burden on the people.
– There is no doubt about that.
– In that case, the amendment could not be made in another place without a fresh message from the Governor-General. Clearly, we cannot request another place to make an amendment which, under its own rules, it would be prohibited from making. So far as I know, the ruling which I havequoted has not been amended. It would, therefore, seem that this is a case which comes within the prohibition.
– A similar point of order has been raisedon previous occasions in this Senate. Honorable senators will remember that when Senator Needham proposed to move his request by way of an amendment I ruled that I could not accept any amendment that proposed to increase a proposed charge or burden on the people. In this connexion, the Senate is governed by section 53 of the Constitution, which provides that-
The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.
The practice followed by the Senate is laid down in Boydell’s Practice and Procedure on Appropriation, Taxation, and Other Money Bills, which has been referred to by the Vice-President of the Executive Council (Senator Pearce) ; but the ruling given in connexion with the Bounties Bill, 1907-8, which the Minister quoted, does not, in my judgment, apply in a similar way to the present case. In the first place, I point out that Senator Needham has not moved an amendment.
I have already ruled that the Senate has not the power to make an amendment in a bill of this nature. But the Senate would be in order in requesting the House of Representatives to make this amendment. It would be for the House of Representatives to determine whether or not the request of the Senate should be agreed to. I call attention to the decision given on page 17 of the publication mentioned, which reads -
The practice, therefore, has been established that, while the Senate cannot amend a proposed law so as to increase a proposed charge or burden on the people, it may yet request the House of Representatives to make amendments having that effect.
I therefore rule that the request moved by Senator Needham is in order.
– I give notice in writing of my dissent from your ruling.
– It is now necessary for me to leave the Chair and report the matter to the Deputy-President.
In the Senate:
– In the committee Senator Needham desired to move an amendment to clause 3 to strike out the words “ three hundred “ with a view to inserting the words “ four hundred and fifty.” Seeing that the Constitution provides that it is not within the power of the Senate to increase a proposed charge or burden on the people, I informed Senator Needham, that it would be out of order for him to move the amendment, but that he would be in order in moving it by way of a request to the House of Representatives. He did so, whereupon, Senator Greene raised a point of order. I ruled that the request moved by Senator Needham was in order. Senator Greene then gave notice of dissent from my ruling on the ground that, according to section 56 of the Constitution, a vote, resolution, or proposed law for the appropriation of revenue or money cannot be passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General in the House in which the proposal originated. I submit that in this matter we are governed not only by the Standing Orders of the Senate, but also by the practice and procedure that has grown up during the last twenty-six years. I direct attention to Boydell’s Practice and Procedure on
Appropriation, Taxation, and other Money Bills, on page 17 of which he says -
The practice, therefore, has been established that, while the Senate cannot amend a proposed law so as to increase a proposed charge or burden on the people, it may yet request the House of Representatives to make amendments having that effect.
I submit that my ruling is in accordance with the practice of the Senate as set out by Boydell. Senator Needham has not proposed to amend a proposed law; he has merely moved a request to the House of Representatives that the law be amended in a direction that lies within the power of the House of Representatives.
– The Temporary Chairman has quoted from page 17 of Boydell in support of his ruling. I point out that ‘the ruling referred to related to a duty of Customs which it was proposed to impose. It is perfectly clear, and has been established by long practice, that this Senate has an undoubted right to make requests to the House of Representatives to increase the burden on the people in all matters of taxation, and that the House of Representatives is free, after the receipt of such a message, to proceed to impose extra duties at the request of the Senate.
– That is within the power of the House of Representatives.
– Yes; it can proceed at once to impose extra duties. It can do it at once and without trouble. This, however, is an entirely different matter, and is not in any sense governed by the ruling to which the Temporary Chairman referred. Let me refer you, sir, to section 56 of the Constitution. It reads -
A vote, resolution, or proposed law for the appropriation of revenue or moneys shall not be passed unless the purpose of the appropriation has in the same session been recommended by message of the GovernorGeneral to the House in which the proposal originated.
I wish to direct your attention particularly to the words. - “ to the House iu which the proposal originated.” The proposal which we have under consideration originated in the committee of the Senate, and I ask where is the GovernorGeneral’s message covering it t Is it here? In Quick and Garran ‘s The Annotated Constitution of the Australian
Commonwealth, page 682, there is reference to the point now under discussion. Mr. Barton is quoted as follows -
Mr. Barton was not in doubt as to the advisability of requiring those impositions and appropriations to bo recommended by message. “ .Even if I am right in thinking that a bill of the character indicated in the first part of the clause 54 -
That is section 53 of the Constitution, which provides that proposed laws appropriating revenues or moneys or imposing taxation, shall not originate in the Senate - docs not require a message, still I do not find anything in the Constitution to do’ away with the necessity of a message, even in the Senate, for a vote or resolution, if such a vote or resolution is taken in the Senate. But now let us conic to the practical side of the question. Under this Constitution, with the Ministry practically responsible to the House of Representatives, as they will be if this constitution is carried, is it likely that a Ministry responsible to that House, no matter which House he sits in, will ever bring down a message to the Senate?”
That is clear, definite, and emphatic. I am fortified in this view from my own knowledge of what would happen supposing this request went down to the House of Representatives and members there were confronted with the problem that would immediately rise out of it.
– They would have no power to act.
– Exactly. If this request went down to the House of Representatives, that place could not embody it in the bill.
– Not on their own initiative.
– The only way in which it could be done would be for the Government of the day to ask the GovernorGeneral for a new message, and proceed as with a new measure.
– What would happen if a private member moved a similar amendment in the House of Representatives ?
– A private member could not do that. The case quoted by the Temporary Chairman, related to a measure imposing taxation. The Constitution is not involved in that at all. The House of Representatives, on its own initiative, can and does make amendments requested by the Senate in taxation bills ; but I submit that this bill is different. If this request went down to the House of Representatives, that place would be utterly and absolutely powerless to act upon it. It could only proceed to give effect to the Senate’s request by getting, through the Government, a fresh message from His Excellency the Governor-General.
– The Senate could not persist with the request.
– Of course not; it would be utterly impossible to think of doing that. Even if earlier rulings have covered this point, it is, I submit, perfectly clear that the Senate has no right to do what is proposed in this way ; and that if it be persisted in, the Senate will be made to look ridiculous.
– It is quite true that there have been established in this Senate precedents for attempting by request to amend bills which we have power to amend in the ordinary way; but I have never agreed with those precedents. If any honorable senator cares to look up the Constitution and the Standing Orders, he will find that there are only two classes of bills which this Senate may not amend. The first are bills providing for the ordinary annual services of the year, and the second are bills imposing taxation. It is quite clear that the proper course in relation to such measures is to proceed by request; but it is anomalous for the Senate to proceed by request in the case of bills which this Chamber has a perfect right to amend in the ordinary way. A common-sense reading of the Constitution and the Standing Orders leads one to the conclusion that the only bills upon which the Senate should proceed to amend by request are measures which this Chamber may not amend in the ordinary way. lt is clear that the Senate can amend the bill now under consideration, and therefore it should not proceed bv request. I do not propose to traverse the ground covered by” Senator Greene, who put the case clearly and cogently; but I wish to emphasize that the practice of this Parliament is based on the practice of the mother of parliaments, the House of Commons. Where our own Standing Orders do not make cleaT the procedure that should be followed, Ave are always guided by the practice of the House of Commons. Invariably, that course has been followed. In May’s Parliamentary Practice, 9th edition, page 510, there appears the following, which hears on the point under discussion : -
A3 is subsequently explained (see page 531), the constitutional principle which vests in the Crown the sole responsibility of incurring national expenditure, forbids an increase by the Commons of a sum demanded on behalf of tho Crown for the service of the State.
That absolutely forbids the increasing of the amount, because on the Crown rests the whole responsibility of saying how much is required. On page 531 there appears the following: -
The constitutional principle which vests iu the Crown the sole responsibility over national expenditure (see page 504), and which forbids the Commons to increase the sums demanded by the Crown for the service of the State (sec page 510) is strictly enforced in the committee of supply. For instance, it was held. 9th March, 1S03, that a member could not move an addition to the number of men stated upon the army estimates, although, apparently, the grant for pay upon the estimates provided for a number of soldiers larger than the number therein specified.
It will be seen that the British practice does not even allow a member to move for the addition of a man to the service, because his inclusion would increase the amount asked for by the Crown for the maintenance of the army. It is not necessary to quote further from May, but I should like to say that all the rulings establish the principle that the charge cn the taxpayer may not be increased unless the Crown specifically asks for it. What are we asked to do? In voting annual supplies of any amount, we are asked to supply sufficient money for the necessities of the Crown; but we are not supposed to know whar the necessities of the Crown are. That responsibility rests upon the Ministry of the day. The practice of voting more than is asked for has always been frowned upon by the House of Commons, and has never been assented to. It would be wise to follow that safe constitutional practice which has proved a valuable safeguard to the British taxpayers down through the centuries.
– I agree with the point made by Senator Givens. Section 53 of the Constitution elucidates the point which is engaging our attention at the moment. It provides -
Proposed laws appropriating revenue or moneys or imposing taxation shall not originate in the Senate.
The Senate may not amend proposed laws imposing taxation or proposed laws appro priating revenue or moneys for the ordinary annual services of the Government.
The bill under consideration cannot be regarded as a measure appropriating moneys for the ordinary annual services of the Government, such as an ordinary supply bill or an appropriation bill. I therefore agree with Senator Givens that this measure does not come within the category of those provided for in the second paragraph of section 53. The power of request was inserted in the Constitution to meet the position which might arise in connexion with bills which the Senate may not amend. In order that the Senate might have some control over those’ measures, it was provided that the Senate could request the House of Representatives to make amendments. As this bill is neither a taxation measure nor a bill appropriating revenue or moneys for the ordinary annual services of the Government, it is not one 111)OIl which the Senate should exercise its power of request. It is a bill which the Senate may amend. In section 53 it is further provided -
The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.
Two things are clear. This is not a bill upon which we should make requests, because it is not a taxation measure; and it is not a bill appropriating money for the ordinary annual services of the Commonwealth. This is a bill that wc can amend; but we cannot amend it in such a way as to increase the proposed charge or burden upon the people.
– At the outset I so worded my motion as to make it a direct amendment to the bill; but the Temporary Chairman of Committees ruled that this was not a measure that we could amend. I, therefore, moved by way of request. During the 26 years that the Senate has been in existence, similar requests have been made to another place. Why this point should bc taken on the present occasion I am not aware. Various sections of the Constitution have been quoted by some honorable senators who are lawyers, and others who are not. I shall quote a portion of section 53, which has not been referred to by other speakers. It reads: -
The Senate may, at any stage, return to the House of Representatives any proposed law which the Senate may not amend, requesting by messagethe omission or amendment of any items or provisions therein–
– That provision does not apply to this particular measure.
– The section continues -
And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modification.
The first statement of the Leader of the Senate was that he hoped the committee would not agree to the request being made to the House of Representatives. If that House accepted it, he did not know what might happen; I presume he thought that the Government would have to resign. The right honorable gentleman is-a very keen student of the Standing Orders, and I am surprised that he should have to be reminded by Senator Greene that it is not competent for us to ask the House of Representatives to amend tin’s measure in the direction that I have suggested. It would be wrong if t his branch of the Legislature were “ cabin’d, cribb’d, confm’d “ by a ruling along the lines suggested by Senator Greene.
– What would be the position in the other House if a private member were to move such an amendment?
– There are 75 members in another place, who are quite capable of dealing with that point. I have sufficient responsibility, as a member of this Senate, without assuming any of their prerogatives. The power of the Senate is in question. Your ruling, Mr. Deputy President, will decide whether any honorable senator, in either a private or a ministerial capacity, is entitled to move in the direction that I have followed. I dare say that in the past Ministers of the Crown have moved in that direction. This amendment is chosen as the battleground upon which to determine the powers of the Senate. I contend that I have adopted the right practice. I believe there are very few honorable senators who will question an opinion by the gentleman who for so long held the position of Clerk of the Senate. I ask honorable senators to be wary of placing themselves in shackles in the manner that is suggested by Senator Greene. If you, sir, uphold the objection which has been raised, you will place the Senatein shackles; and if honorable senators support your ruling, they will shackle themselves. Apart altogether from the merits or the demerits of the request, I contend that it is in order and that the Senate has the right to prefer it.
– The Leader of the Opposition (Senator Needham) has omitted to mention a point that has a very important bearing on his case. It is that in respect of a measure of this kind no amendment may be made to increase expenditure unless it is accompanied by a message from His Excellency the Governor. Where is that message?
– That is provided for in section 56 of the Constitution.
– Yes. These matters contain a substratum of common sense, and they have to be administered in that way. It is interesting to note the differences, which, though slight in appearance, may have far-reaching consequences, between rulings that have been given by successive occupants of the chair. Honorable senators who have had any experience of Upper Houses must know that there is practically no difference between a request and an amendment. “ Request “ is merely a euphemism that is adopted to meet the natural objections of Lower Houses to Upper Houses having co-equal powers.
– A request is an origination.
– That is so.
– A request is merely a substitution for an amendment.
– Practically so. The two methods are identical. A request, if refused, may be pressed until it reaches the stage when a bill must be dropped or a conference of the two Houses must ensue. An amendment can carry the matter no further.
– When the House moves by way of amendment, it says, “You must do it.” When it adopts the other procedure, it says, “ Will you please do it.”
– Exactly. In the latter case, in the event of a refusal, the Upper House says, “ If you do not, you will lose your bill.” No further result can be brought about by making an amendment to the measure. It has been proved time and again, not only in Upper Houses in the States, but also in the Senate, that, when requests have been sent and not acceded to, pressed and again not acceded to, a bill has had to be dropped or a conference of the two Houses has had to be called. The general principle of legislation gives to the people’s House, as it is called in the States, the right to initiate financial legislation, but preserves to Upper Houses the right to deal with such legislation by way of amendment. Upper Houses have continuously, throughout the history of Australia, fought for and maintained that right. It cannot be denied, however, that they may not do what amounts to an initiation of. finance, by increasing the sum which is stated as the total amount for the measure that is being considered. It is reasonable to suppose that that would be an initiation. Appealing to the common sense which is the substratum of these matters, let me ask honorable senators to consider what would be the effect if such were not the case. An ordinary financial measure involving an extremely small sum might be sent to an Upper House which, by the use of its power to request amendment, might make an altogether new bill of it, and render necessary the promulgation of a different financial policy and the presentation of a new budget by any government that happened to be in power. Such a contingency must be avoided.
– [From the point of view of common sense, I think that the honorable senator is right; but has he :’uy thing to say regarding tho practice that has been established in this Senate?
– Certainly. It is not necessary to go further than the provisions of the Constitution, under which no member of either House may propose increased expenditure without an accompanying message from the Governor-General. I have already said that, in this matter, I had two sporting chances - first, that the amendment would not pass this Chamber, and, secondly, that it would be returned by the House of Representatives with a message stating that it was out of order and could not deal with it. I am sorry that my double has been destroyed so early in the race. I have had no doubt upon the matter since I heard the request put forward; but my position was perhaps, as delicate as that of the Leader of the Senate. I did not rise to a point of order, because E did not wish it to be thought that i wanted to avoid dealing with it. I am not altogether sorry that it has been raised. If the matter is settled at this stage it will save the dignity of thu Senate.
– One very simple test can be applied to this question : Is the requested amendment one which the House of Representatives could make? An honorable senator who is at all acquainted with parliamentary procedure can answer that question in only one way. The amendment is one which the House of Representatives could not make. That being so, clearly this Chamber cannot request that it be made; otherwise, a ridiculous anomaly would be created. That is the supreme, the vital test.
The DEPUTY PRESIDENT (Senator Plain). - The ruling of the Temporary Chairman ‘‘Senator Duncan) that the request moved by Senator Needham is in order is in accordance with what has been the practice of the Senate; but the objection that it would be impossible for the House of Representatives itself to make the requested amendment is, I think, fatal. It would be little short of farcical for me to rule that it is in order for an honorable senator to move a request for an amendment that another place cannot make, and therefore I am compelled to rule against the decision of the Temporary Chairman, and to uphold the point of order raised by Senator Greene.
– Western Australian senators are endeavouring to extract £300,000 from the taxpayers of the Commonwealth. It is, no doubt, very pleasing to them, but I strongly resent their proposals I look upon a proposed payment of this sort as something approaching corruption or bribery. Are the people of Western Australia of inferior type, incapable of governing the vast area of country placed at their disposal many years ago ? Western Australia is a magnificent country. It has an area of 975,920 square miles, and I venture to say that, its soil’ for at least 250 miles east from the
Indian Ocean is in many respects equal to that of any other portion of Australia. The climate in that part of the State is all that could be desired. It is quite true that there is a large portion of the State called the Nullarbor Plain, about 450 miles by 300 miles wide, where the rainfall is limited. On this plain the soil is not very deep, and the whole stretch is practically treeless, but it is not safe to predict that that country may not be usefully employed in the future. According to the latest figures, the population of Western Australia is 372,183, and physically, intellectually, and in every other way the people of the State are about (he same as those in any other part of the Commonwealth. Quite recently, when an enterprising Sydney newspaper took steps to ascertain the most capable, intellectual, and physically perfect woman in the Commonwealth, Miss Beryl Mills, a Western Australian, won the prize. In my opinion, the people of the western State do not need a grant. The proposal to pay them a special grant is merely an effort by a very limited number to extract money unfairly from the people of the eastern States. New South Wales, for instance, contributes nearly half the direct taxation that finds its way into the Commonwealth Treasury. Why cannot the people of Western Australia, who are the equal of those in the eastern States, rely on their own resources t
– Because there are not enough of them.
– There are 382,183.
– Over how many square miles did the honorable senator say ?
– Only 975,920 square miles. The total population of Australia is approximately 6,000,000, and the total area of Australia is approximately 3,000,000 square miles, so that 1 here are for the whole of the Commonwealth two people to the square mile, whereas the population of Western Australia is one to two and a half square miles. I find, on reference to Australian Statistics, Bulletin No. 106, that Western Australia has about 2,500,000 acres under wheat, and that it is estimated that this year the crop will amount to about 30,000”,000 bushels. From the same source I gather that the State has nearly 7,000,000 sheep, and last year had a wool clip of 47,000,000 lb. Yet we find honorable senators supporting a Government which deliberately sets out to give Tasmania and Western Australia money which is collected from the people in the eastern States. I think that every one should pay his way, and that if the people of Western Australia and Tasmania are not prepared to do so, they should be told that they ought to do so. They have no right to come to this Parliament, in season and out of season, asking for special grants. We have already, in this bill, decided to abolish the per capita payments, yet immediately that is done, we are asked to give Western Australia £300,000 for five years. At the end of that time, the State will probably ask for £450,000. The gold yield of Western Australia last year was valued at £1,857,715, while the total gold extracted from all the mines in the Commonwealth was valued at £2,200,119. Yet the people of the western State are unable or unwilling to stand up to their own expenses. The proper thing for them to do is to cut down those expenses. Let them start off by abolishing their Upper House and unnecessary expenditure of that kind. Why should places like Western Australia and Tasmania have two Houses of Parliament ?
– We should be sorry to have only one House if it was like the New South Wales Parlianient.
– There is nothing wrong with the New South Wales Parliament; it is doing all right. The New South Wales Government does not come to the Commonwealth Parliament asking for assistance as do the Governments of Tasmania . and Western Australia.
– Is the honorable senator thinking of the Kyogle-South Brisbane railway ?
– Some years ago, when the Commonwealth Bank was conducted as it should be, and the note issue branch made a substantial profit, £3,000,000 was taken from that source free of interest, and utilized in connexion with the construction of the East-West line. To-day Western Australia is benefiting by that expenditure.
Clause agreed to.
Clause 4 (Additional payments t» Tasmania).
– I ask the Minister iu charge of the bill (Senator Pearce) why a grant is to be paid to Western Australia for five years and to Tasmania for only two years ?
– In addition to making these grants to Western Australia and Tasmania, the Commonwealth Government has made available to Tasmania the services of the Development and Migration Commission and the Council for Scientific and Industrial Research, in order to find a means for an economic rehabilitation of the State to enable it to increase its productivity. I understand the Development and Migration Commission has almost ready for presentation the first of its ‘recommendations, to enable that State to take certain action in the direction of increasing its productivity. The Government believes that if certain action is taken the State can become sufficiently prosperous to carry on without financial assistance after a time. Within the two years specified in the clause these reports will be made available to the Commonwealth and to the State Government. We shall then be in a better position to ascertain the financial assistance Tasmania will require in the future and the direction in which it should be applied. This is admittedly a temporary expedient until important problems have been properly investigated. The services of these two bodies are now at the disposal of the Tasmanian authorities, and I believe their work has. already received the approval of the Government and the people of Tasmania as well as of their representatives. The Government believe that within the period mentioned these two bodies will be able to present reports that will guide Parliament as to the direction in which further grants should be made, and the conditions which should apply in order to restore the financial stability and economic prosperity of Tasmania.
– I listened with pleasure to the statement of the Minister for Defence (Senator Pearce), but I point out that the services of the Development and Migration Commission and the Council for
Industrial and Scientific Research arcavailable to all the States.
– Yes, but they arc not in the same category. At present these two bodies are concentrating their efforts upon Tasmania.
– There is no doubt that certain gentlemen associated with these two bodies, particularly Dr. Finlay, are doing remarkably good work in Tasmania ; but a number of years must elapse before Tasmania, as the result of the work of the commission, can possibly reach a sufficiently increased stage of development.
– That may be; but these bodies can submit preliminary reports.
– The report to be submitted will, I think, be a good one, because I know that the gentlemen conducting the investigation are in every way qualified for this important work. The difficulty, however, is that in Tasmania the production per head is estimated at about £50, whereas that in the other States is about £68. To bring the productivity of Tasmania up to that of the other States will take a number of years. A definite and reliable report cannot be submitted until considerable time has elapsed and experiments have been conducted. I give these two bodies every credit for the work they are doing; but I feel that while they are conducting their experiments, as they have been for six months, Tasmania has to be financed. We have to consider the position of the Tasmanian Treasurer and the Tasmanian people.
– These proposals are to assist in that direction.
Senator- MILLEN. - Yes. Sir Nicholas Lockyer visited Tasmania, and, although he was only there a month, be submitted a remarkably good report, which disclosed on his part a close knowledge of Tasmania’s requirements. The Government, however, decided to jettison the report, although that which will be submitted by the Development and Migration Commission will, doubtless, be similar to it.
– How does the honorable senator know that?
– If it is of any interest to the honorable senator I may say that I have that impression.
– I do not know what it is likely to contain, although I am the Minister controlling the department under which it is operating.
– I suggest that Senator Givens should read Sir Nicholas Lockyer’s report, in which specific recommendations are made concerning production in Tasmania, and the direction in which it should he financially assisted. I feel in this instance that “Western Australia has also the assistance pf these two bodies, and that the grant should be paid to Tasmania for five years, as is being done in the case of Western Australia. I move -
That the House of Representatives be requested to leave out the word “ two “ with a view to insert in lieu thereof the word “ five.”
– I rise to order. I submit, Mr. Temporary Chairman, that the requested amendment just moved is out of order ; it is governed by the ruling recently given by Mr. Deputy President. It would undoubtedly involve an increased charge or burden upon the people.
– In view of the decision already given that it is not in order to move a request for an amendment the effect of which would be to increase a proposed charge or burden, upon the people, I rule that the request is out of order.
, - If Tasmania had the assistance of a few other honorable senators, such as Senator Millen, it would be receiving not the nominal grant of £378,000, but probably £500,000. Ever since I have been a member of the Senate I have heard these miserable wails, concerning the horrible financial position in which Tasmania is placed. In this instance, the Tasmanian representatives are not satisfied with the proposal of the Government to hand over to it £378,000 a year which has been collected in the other States.
– Is Tasmania in a bad way?
– Apparently it is.
– And there is a Labour Government in power there.
– The present Government is not responsible. Every person disembarking or embarking at Launceston is immediately pounced upon and fined 2s. in the form of a poll tax. Any one building a home or employing labour within a municipal area is yearly fined in proportion to the amount of work hu does. Instead of insisting on the passing of a law such as we have in New South Wales, dealing with such matters, the Tasmanian people come to the Commonwealth Government pleading and praying for financial assistance. I submit that Tasmania is equal in every respect to other portions of the Commonwealth, but the Tasmanian people have an inveterate habit of collecting doles from the people on the mainland to enable them to pay their way. A person who stands at a street corner and holds out his hand for financial assistance immediately loses the respect of his fellow men, and Tasmania, by persisting in her present attitude, has lost the respect of the other States. The representatives of that State are continually holding meetings to find out the most vulnerable spot at which to attack the Commonwealth Treasury. They have been doing this for years, and if I had my way I would stop the practice. For many years it was the custom of certain Italian citizens to stand at street corners in Naples asking for assistance, but under the Mussolini regime persons so doing are compelled to take a draught of castor oil or get to work. It is about time similar action was taken and the Tasmanian people were made to work for their living. I visit Tasmania sometimes, and I know that that State has splendid timber resources. Her fruit, too, is equal to that” grown in any other part of the Commonwealth : but the men of Tasmania ought to be thoroughly ashamed of themselves in that they have neither the desire nor the ability to govern their State without depending on doles contributed by the people of the other States. Why should there be two Houses of Parliament in Tasmania? That involves unnecessary expense. I remind the Senate that New South Wales pays nearly one-half of the direct taxation that flows into the Commonwealth Treasury.
– New South Wales dumps her surplus goods into Tasmania.
– Why does not Tasmania manufacture all she wants?
Instead of investing their money in local enterprises the people of Tasmania invest it in [New South Wales, .and then they complain that the number of factories in Tasmania is limited. In this bill the Government proposes to withdraw the per capita payments from four of the States, and at the same time to make special grants to Western Australia and Tasmania. The provision for the payment of £380,000 per annum to Tasmania has probably been included in the bill in order to capture the support of Tasmanian members. I am absolutely opposed to the Commonwealth paying money to Western Australia and Tasmania. Those States should be able to look after their own requirements. Rather than do what the Government proposes, it would be better for the Commonwealth to abolish excise duties.
– The honorable senator must confine himself to the clause before the committee.
– It would be better for the States to raise their own revenue, rather than that we should continue the present system by which the Commonwealth collects money by the imposition of excise duties, and hands it to ‘the States. The Government is not practising what it preaches, because, while saying that the States should collect the revenue which they spend, it proposes to rob New South Wales, Victoria, South Australia, and Queensland of something which they have received for 26 years, and at the same time to continue to make payments to Western Australia and Tasmania. This is not a bill to abolish the per capita payments, but one which authorizes payments to Western Australia and Tasmania ac the expense of the other States. I hope that honorable senators will oppose the payment of these grants to Tasmania.
– Seeing that the honorable senator is the deputy leader of his party iti this chamber, the Seriate would be interested to know whether he is expressing the views of his party.
– The Labour ‘ party is opposed to this bill.
– The Labour party wants all the States to continue to receive the per capita grants.
– The adjustment of the financial relations of the Commonwealth and the States has always been difficult. The representatives of Western Australia and Tasmania have ever been anxious to get their greedy claws on the revenue derived from Customs and excise, which this year will probably exceed £44,000,000.
– The honorable senator has exhausted his time.
.- Senator Grant has made an unwarranted attack on Tasmania. His remarks, moreover, reveal his ingratitude, because he has frequently told me that he has appreciated his visits to Tasmania. He knows that he has always obtained a fair deal from the people of Tasmania, which is more than can be said of the State which he represents.
– That is not correct.
- Senator Grant knows that one reason why Tasmania is not so prosperous as New South Wales, is that in Tasmania visitors are always given, full value for their money, with the result that the huge surpluses, with which New South Wales is familiar, ure comparatively unknown in Tasmania. Senator Grant compared the population of New South Wales with that of Tasmania. I remind him that one reason for Tasmania’s smaller population is that New South Wales is always offering inducements to Tasmanians to settle in the larger State. The people of New South Wales know that Tasmania each year spends enormous sums of money on the education of her people, with the result that from her educational institutions a greater percentage of brilliant men is turned out than is the case in any of the other States. New South Wales is always on the lookout for such men. I remind Senator Grant, also, that had it not been for Tasmania there would to-day be no New South Wales, because very many years ago the people of New South Wales depended on Tasmania for their food and clothing. Had it not been for foodstuffs sent from Tasmania, the people of New South Wales would have starved.
The TEMPORARY CHAIRMAN.I ask the honorable senator to direct his remarks to the clause before the committee.
– Senator Grant said that there was nothing to justify financial assistance being given to Tasmania; but if he weve to peruse the reports of men who, as royal commissioners, have inquired into Tasmania’s position, he would realize that the present unsatisfactory financial condition of that State is largely due to actions for which Tasmania has no need to be ashamed. Providence has been good to Tasmania in that in the great lake districts there is an abundant water supply available for the development of hydro-electric power. Tasmania recognizes that that wonderful storehouse of energy has been entrusted to her, not only for her own’ use and benefit, but also for the good of Australia as a whole ; and her financial position to-day is largely due to her acceptance of the responsibility of developing that source of power. Will any honorable senator deny that the development of that hydroelectric scheme is not of benefit to Australia ? lt has attracted the attention of many large, industrial magnates, and there is no doubt that in the future-
– What has this to do with the clause ?
– A great deal. Enormous capital expenditure has been incurred, and Tasmania now finds itself seriously embarrassed. I regret that provision is not made that Tasmania shall receive this grant for a more extended term; but after hearing the explanation of the Minister, I am prepared to acceptthat proposal, and believe that an investigation will prove the justice of continuing the proposed assistance.
.- I wish to place on record certain figures in support of my statement that the people of Tasmania are more highly taxed than the people in any other State. Senator Grant said just now that New South Wales was paying nearly as much as Tasmania in State direct taxation.
– I said New South Wales was paying more than one-half.
– According to the Commonwealth Tear-Book for 1926, New South Wales pays £3 12s. per head, State taxation; Victoria, £2 18s, 2d.; Queensland, £4 13s. 9d.; South Australia, £4 5s. Id. ; Western Australia, £3 7s. 3d., and Tasmania, £5 19s. lid! I admit that in the case of Tasmania there should be a deduction of about 7s. or 8s. for lottery income derived from contributions from other States, but even then taxpayers in Tasmania pay nearly £2 a head more than taxpayers in New South Wales.
Clause agreed to.
Clauses 5 to 8 agreed to.
– I should like the Minister to explain upon what basis the amount provided in the schedule has been calculated. The bill provides that during the financial year commencing 1st July, 1927, the Commonwealth shall make monthly payments to the several States in respect of the amounts set out in the schedule for the year commencing 1st July, 1927. Section 7 of the Surplus Revenue Act provides -
Where in this act reference is made in relation to any payment or debit, to the number of the people of a State, the reference shall be deemed to be to the number of the people of the State, as ascertained according to the laws of the Commonwealth by the Commonwealth Statistican as at the 31st December, in the financial year in respect of which the payment or debit is to be made.
According to this bill the number of people for the year commencing 1st July, 1928, should be calculated as at the 31st December of that year. Honorable senators will see that we cannot possibly estimate what the population at that particular time will be. We can only assume that the calculation has been based upon the latest available statistics. This may be alright from the Government’s point of view, but it may not suit the States. The Government in reply to the representations of honorable senators have repeatedly assured us that no State will suffer; but we have no sure knowledge that the figures in the schedule are correct. On a former occasion, figures submitted by the Commonwealth were challenged by the States. The Government has said that any discrepancy in ‘ the figures will be adjusted; but honorable senators are now asked to agree to definite figures in the schedule. Will the Minister inform us of the basis upon which they have been compiled 1 In view of the fact that this is portion of a new scheme for the adjustment of the finances between the Commonwealth and the
States, we should like to have an assurance that, in the event of the figures being proved to be incorrect, the States will get a fair deal, and that discrepancies will be adjusted.
– I think Senator Chapman is under a misapprehension. The figures challenged by the States had relation to the amount of taxation which the Commonwealth proposed to abandon, and which the States could reimpose. In regard to the schedule, the figures have been arrived at by the formula laid down in the Surplus Revenue Act. The figures circulated by the Treasurer in the memorandum to which the honorable senator refers, were issued in advance of December, 1926, and, therefore, were an estimate only. We arrived at them” in this way: We knew what the population was at the end of December, 1925, but had to forecast what it would be at the end of 1926. Basing our figures on the rate of increase in population during the preceding year, and adding that to the population as at the end of December, 1925, we arrived at the figures which were circulated by the Treasurer. We now know what the population was in 1926, hut we have to deal now, not with the year ending 1926, but with the year ending June, 1928. Therefore, again we have to forecast in exactly the same way as we did last year. We take the population at 31st December, 1926, and add to that the known rate of population increase for the preceding year. Excluding the special payment to Western Australia, this method of procedure givesus £134,678 more than was set out in the memorandum supplied by the Treasurer, but which, as I have stated, was arrived at by the same method of calculation.
– I point out to honorable senators that there is a difference between the figures furnished by Dr. Earle Page when he introduced the bill in another place and the amounts provided in the schedule. According to the present figures, New South Wales is to get £2,978,343, as compared with a previous estimate of £2,909,020, representing again of £69,323. Victoria will now get £2,152,615, as against the previous estimate of £2,144,796, a gain of only £7,819; Queensland will now get £1,131,646, as against £1,094,766, the previous estimate, showing a gain of £36,880; South Australia will get £721,269, as compared with the previous estimate of £700,849, a gain of £20,420;. and Western Australia will now get £564,688, less a special grant of £87,188, making in the case of that State a gain of £6,250.
– What is all this about ?
– It is important that honorable senators should know that their States will not lose by this new arrangement, as compared with what they would get if the per capita grants were continued.
– We have already voted the amounts in clause 6.
– Nevertheless, the schedule should receive careful consideration. Page 41 of Hansard of the present session contains figures relating to the capitation grant over a period of ten years. Those figures show that the amounts have increased or decreased very consistently over a number of years. Between 1924-25 and 1925-26 the following increases took place : -
Tasmania showed a loss of £780. Yet we find that the increases shown by the amounts actually paid for the last year I have quoted are New South Wales, £69,323, and Victoria, £7,819. There appears to be a discrepancy. No opportunity has been afforded for a check of the figures by either honorable senators or the State authorities. If the Commonwealth figures are wrong, and any State loses thereby, the representatives of that State will be held responsible. I ask the Minister (Senator Pearce) whether the undertaking of the Prime Minister to adjust any discrepancy will be observed.
Schedule agreed to.
Title agreed to.
Bill reported without amendment.
Motion (by Senator Pearce) proposed -
That the report he adopted.
.- I move-
That the bill be recommitted for the consideration of a proposed new clause 6a.
I apologize for having to take this action ; it has been rendered necessary by the irregular progress which was made in the debate. Whilst Senator Payne was delivering a very impassioned and, I feel sure, effective reply to a lot of irrelevant remarks that had been made by a member of the Opposition, I left the chamber for a few minutes in the belief that, in all human probability, he would continue for at least half an hour. To mydismay, when I returned to the chamber I found the committee considering clause 7. I therefore could not move for the insertion of a new clause to, follow clause 6. I trust that the Leader of the Senate will agree to the recommital of the bill.
– I object to the recommittal of the bill. Wo have had a very long and animated discussion upon it. Are we to be kept here longer because an honorable senator neglects his duty ? If the motion is agreed to, I shall prolong the discussion by taking the point of order that the proposed amendment is outside thescope of the bill, is irrelevant, and has nothing whatever to do with the purpose of the measure.
– It has been my invariable rule during my ministerial life to oppose the recommittal of a bill ; but, having had to listen to the speech to which Senator Kingsmill has referred, I can well understand his desire to be outside the chamber during its delivery. Therefore, on this occasion, I must depart from my usual practice and afford the honorable senator an opportunity of submitting his proposed new clause. If I had had any doubts regarding the wisdom of doing so, the intimation that Senator Givens has just made would have encouraged me to agree to the recommittal. If the question can be dealt with in the way suggested by Senator Givens, there will be a happy issue to our afflictions.
– The Senate has listened at times to long and irrelevant remarks by Senator Kingsmill. This evening he neglected his duties. Whilst Senator Payne was delivering one of those orations that he knows so well how to deliver, and which are appreciated by every intelligent member of this chamber, Senator Kingsmill found it necessary to absent himself. He now asks us to agree to the recommittal of the bill so that he may move one of those foolish amendments for which he is noted. If the motion is carried, I shall exhaust every form of the Senate to put the case for the State that I represent.
– I rise to order.Is the honorable senator in order in making threats regarding the speeches he will inflict upon honorable senators?
The DEPUTY PRESIDENT (Senator Plain). - The honorable senator is not in order in making threats; but he is quite in order in informing the Senate of his intentions in the event of the recommittal of the bill.
– I merely wish to say that if the bill is recommitted I shall use every means in my power to place before honorable senators the case for the State that I represent. We are compelled to sit here night after night listening to remarks by Senator Kingsmill which are pointless and meaningless. Then, when he neglects his duty, he desires to delay the Senate so that he may submit a motion that, I feel sure, will not meet with the approval of this chamber. I shall oppose in every possible way the proposed new clause.
Question put. The Senate divided.
Majority . . 24
Question so resolved in the affirmative.
In committee (Recommittal).
The following papers were presented : -
Immigration Act- Return for 1926. Contract Immigrants Act - Return for 1926.
Motion (by Senator Pearce) agreed to-
That the Senate, at its rising, adjourn till to-morrow, at 11 a.m.
Senate adjourned at 10.52 p.m.
Cite as: Australia, Senate, Debates, 21 March 1927, viewed 22 October 2017, <http://historichansard.net/senate/1927/19270321_senate_10_115/>.